The One Big Beautiful Bill, enacted on July 4, 2025, made some significant changes to the charitable contribution tax deductions that can impact individuals (and corporations) for 2025 and beyond.
Beginning 2026, non-itemizers can benefit from a charitable deduction of up to $1,000 ($2,000 for MFJ) as an Above the Line Deduction. Under the 2017 TCJA, many taxpayers no longer Itemized Deductions as a result of the higher Standard Deduction, and therefore, did not benefit from charitable donations. An Above the Line Deduction allows more taxpayers to benefit from their charitable donations, so we recommend keeping good records of your charitable donations because they may now be deductible on your tax return.
However, also effective 2026 is a new floor on deductions for Itemizers. Taxpayers will only be able to claim a tax deduction to the extent that their contributions exceed 0.5% of their AGI. For example, a taxpayer with a $200,000 AGI can only deduct charitable contributions in excess of $1,000 on Schedule A.
Therefore, a review of your current tax situation and charitable contribution goals should be reviewed to make sure you maximize the opportunity based on the changes in tax law.