charitable contributions

The new tax law establishes a partial deduction for charitable contributions of individuals who elect to not itemize their taxes. Beginning after December 31, 2025, a charitable donation deduction will be available for those who do not itemize their returns, those taxpayers who take the standard deduction. The deduction amounts to $1,000 for single filers and $2,000 for joint filers.

 

Also beginning after December 31, 2025, charitable donations for those taxpayers who choose to itemize deductions will have a limitation placed upon the donations. Charitable donations will be allowed in an aggregated amount that exceeds 0.5% of the taxpayer's contribution base, which is the adjusted gross income without any net operating loss carryback. For most taxpayers, this means the taxpayer’s adjusted gross income. You will multiply your adjusted gross income by 0.5% to determine the floor for which charitable donations must exceed before the donations will be deductible.

 

The 0.5% floor does not apply to tax deductions for individuals who choose the standard deduction mentioned in the previous paragraph.

The "One Big Beautiful Bill Act" (OBBBA) significantly changes how you can deduct charitable donations, whether you itemize or not. The key changes are set to begin in the 2026 tax year.

 

Changes for Taxpayers Who Take the Standard Deduction:

• Up to $1,000 (single) or $2,000 (MFJ) for direct cash gifts to 501(c)(3) charities.
• This deduction applies to cash contributions made to public charities but excludes donations to donor-advised funds or private non-operating foundations.

Changes for Taxpayers Who Itemize:

• Starting in 2026, you can only deduct charitable contributions that exceed 0.5% of your adjusted gross income (AGI).
• For high-income taxpayers in the top 37% tax bracket, the value of their itemized charitable deductions will be capped at a 35% marginal rate.

@ Hope this helps!! Thanks for the question.

 

 

 

And these changes are not in effect until the 2026 tax year, so no effect on 2025 taxes, correct?

Thank you,

Frank

That is correct. The changes to the charitable contributions listed above take effect after December 31, 2025.

Thank you,

Frank

Thanks for info so far.

When it says "donations" is it all the Charitable Donations added up (you specified Aggregate)?  each Donation (i.e. each check must be above .5% of AGI, which seems unreasonable)?  or possibly each entity your enter, i.e. Charity Org 1 - total for year must be .5% AGI and Charity Org 2 - total for year must be .5% of AGI?

Also, I have seen some entities also say that the floor is also not-deductible, meaning if your have .5% of AGI is $660, then $660 is not deductible?  That doesn't seem right when I read the text of OBBB.  Any clarity coming from IRS for you?  I see nothing in IRS pages at this time.

Thanks

For Itemizers only: The 0.5% AGI floor applies to the sum of all your qualifying charitable contributions for the entire tax year & not each donation or each charity.

Example:

• Your AGI: $300,000

• 0.5% AGI Floor: $300,000 times 0.005 = $1,500

• Your Total Donations for the year: $5,000

• Your Itemized Deduction: $5,000 (Total Donations)- $1,500 (AGI Floor) = $3,500

The amount equal to the floor is not deductible.  If your 0.5% AGI floor is $660, then that $660 is not deductible. If you donated exactly $660, your deductible amount would be $0. If you donated $1,000, your deductible amount would be $340 ($1,000 - $660).

 

You are also correct that official IRS clarity is currently limited, as the law is newly enacted and its major provisions only take effect in 2026. The IRS typically issues detailed guidance, publications, and forms closer to the effective date.

 

@jcgbus Thanks for the question!!