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Important Changes to Charitable Deductions: What You Need to Know for 2026 and How to Plan in 2025
Stephanie Rupnik
Sep 15, 2025
There will be significant changes to the charitable deduction rules that will take effect for tax years 2026 and beyond.
These changes may impact your tax planning and charitable giving strategies, so it’s important to understand what’s new and how you can maximize your deductions in 2025 before the new rules apply.
What’s Changing in 2026 for Charitable Deductions?
1. Permanent Above-the-Line Deduction for Non-Itemizers
If you take the standard deduction you can claim an additional above-the-line deduction for charitable contributions of up to $1,000 (single filers) or $2,000 (married filing jointly). This deduction is limited to cash donations to qualified public charities.
2. New 0.5% AGI Floor for Itemizers
If you itemize deductions, only the amount of your charitable contributions that exceeds 0.5% of your adjusted gross income (AGI) will be deductible. For example, if your AGI is $200,000 and you make a $3,000 charitable contribution, the first $1,000 will not be deductible and your charitable deduction will be $2,000. However, you can carryforward the $1,000 limited donation as a future deduction for up to five years.
3. Itemized Deduction Limitation for High Earners
If your income is high enough to put you in the top tax bracket, your total itemized deductions (including charitable donations) will be reduced. The reduction is based on how much your income goes over the threshold for the highest tax bracket. A high earner in the 37% tax bracket will essentially have the tax benefit of all the itemized deductions capped at a 35% tax rate. The reduction is applied after the new 0.5% AGI floor for charitable deductions have been taken into account.
Charitable Contribution Tax Planning Strategies for 2025
Given these upcoming 2026 changes, here are some strategies to consider for 2025:
1. Accelerate and Bunch Contributions
Consider making larger charitable gifts in 2025 to take advantage of the more favorable rules before the 0.5% AGI floor applies. Bunching several years’ worth of contributions into 2025 can help you exceed the standard deduction and maximize your deduction.
2. Utilize Donor-Advised Funds (DAFs)
When you set up a donor-advised fund, you get an immediate tax deduction for the full amount you contribute in 2025. Then, the money stays in your donor-advised account where it can be invested and potentially grow over time. You can recommend grants from your fund to your favorite charities whenever you want – right away or spread out over many years.
3. Time the donation of appreciated stock
If you have appreciated long-term capital gain stock, consider donating it in 2025 instead of waiting until later. By donating the stock directly to charity, you won’t pay tax on the capital gains and you get a charitable deduction for the full market value of the stock (not just what you paid for it).
4. Utilize Carryforwards Wisely
If you have charitable contribution carryforwards, use them in 2025 if possible.
5. Plan for a Qualified Charitable Distribution in 2026
If you are an IRA owner aged 70½ or older in 2026, you can donate to a charity directly from your IRA. The amount of the qualified charitable distribution is excluded from your taxable income, so it is not affected by the new itemized deduction limits or floors.
6. Plan for the Non-Itemizer Deduction
For those who will not itemize in 2026 and beyond, plan to take advantage of the new $1,000/$2,000 above-the-line deduction for cash gifts.
Conclusion
2025 is a key year for maximizing charitable deductions before the new rules take effect. By accelerating and bunching contributions, timing the type of gift, taking advantage of donor advised funds and planning for the new non-itemizer deduction, you can make the most of your charitable giving and minimize your tax liability.
If you have questions about how these changes affect your specific situation or would like to discuss your charitable giving strategy, please reach out. Kirsch CPA Group is here to help you navigate these new rules and optimize your tax planning.
© Copyright 2025. All rights reserved.
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About The Author
Stephanie works to understand a client’s business through the ins and outs of their bookkeeping. With her extensive…
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