Planning Your Giving in Light of the New Tax Laws

On July 4, 2025, the One Big Beautiful Bill Act was signed into law, setting the stage for important changes in tax policy—some of which could impact your charitable giving strategy.

While many key provisions from the 2017 Tax Cuts and Jobs Act will now remain in place, the legislation introduces new provisions that take effect January 1, 2026, and are worth reviewing.

Here’s a quick look at what’s staying the same, what’s changing, and how donors can plan ahead.

What’s Staying the Same:

• Tax brackets: The current tax rates (10%, 12%, 22%, 24%, 35% and 37%) are here to stay permanently.  

• Standard deduction: Most taxpayers will continue to use the elevated standard deduction—$15,750 for individuals and $31,500 for married couples in 2025—adjusted annually for inflation.

• Cash gift deduction limits: If you itemize, you can continue to deduct cash gifts to public charities up to 60% of your adjusted gross income (AGI).

• Estate tax exemption: The federal estate and gift tax exemption will remain high and increase to $15 million per individual (indexed annually).

What’s New in 2026:

• Tax break for non-itemizers: You can deduct up to $1,000 (individuals) or $2,000 (married couples) for charitable gifts, even if you don’t itemize.

• New threshold for itemizers: The new law adds a minimum charitable contribution rate if you itemize your deductions. The law requires taxpayers to give at least 0.5% of their AGI to receive a tax benefit for their charitable giving.

• Cap for high earners: Under current law, top earners get a 37-cent tax benefit for every $1 deducted. Starting in 2026, that benefit will be capped at 35 cents per dollar.

Planning Ahead With these changes on the horizon, we encourage you to consult with your tax advisor to understand how these changes may affect your giving in 2025 and beyond. Here are three smart ways to make the most of your philanthropy:

• Give at the right time: Donating more in 2025, or “bunching” multiple years of giving into one, could result in bigger tax savings. Donor-advised funds, which can be established at the Community Foundation, can be a helpful tool for this.

• Think beyond cash: A thoughtful mix of cash and non-cash gifts (like stocks or other assets) may offer more benefits, especially with the added complexity new rules bring for itemizers.

• Get expert advice: A trusted tax professional or financial advisor can help build a giving plan that reflects your values and goals while keeping your tax picture in mind.

We remain committed to helping donors navigate these changes. Please contact Sarah Schoer, Philanthropy Specialist, at sschoer@givinggreater.org or 563-264-3863 to learn more about our flexible giving options that ensure your philanthropy maximizes both impact and tax efficiency.