As you plan for upcoming tax years, keep in mind that major changes to charitable contribution and itemized deduction rules will start in 2026. The One Big Beautiful Bill Act (OBBBA) introduced new rules for charitable deductions. If you itemize, it may be better to donate this year.
If you do not itemize, consider waiting until January 1 to make your donation.
Starting in 2026, individuals who do not itemize deductions can deduct up to $1,000 ($2,000 if married filing jointly) of cash contributions to qualified charities annually. It is best to wait to 2026 to donate to charity if you do not itemize so you can take advantage of this new tax law.
On the other hand, individuals who itemize deductions might want to make donations now, before the end of the year. Starting on January 1, 2026, charitable deductions are limited to those that exceed 0.5% of your contribution base, generally your adjusted gross income.
In addition to the 0.5% floor limit on charitable deductions in 2026, taxpayers in the 37% bracket are limited to a tax benefit of 35% on their total itemized deductions. For 2026, the 37% bracket starts at taxable income amounts of $640,600 for single filers and $768,700 for joint filers. High-income taxpayers might want to consider bundling their donations and donating for 2025 and 2026 by the end of this year before the limitations kick in.
Taxpayers who are taking Required Minimum Distributions (RMD) from their IRA may want to consider making their charitable donations through a Qualified Charitable Distribution (QCD). A QCD allows a taxpayer age 70½ or older to reduce their taxable income by donating to a qualified charity directly from their IRA. The 2026 limit for QCDs is $115,000. These distributions are excluded from gross income and are not subject to itemized deduction limits.
Please contact your Alloy Silverstein tax advisor with any questions.
Associate Partner
Kim has developed a primary focus on providing accounting, tax, and advisory services to the professional service area, including law firms and medical practices.
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