The One Big Beautiful Bill Act (OBBBA) brings some of the biggest changes to charitable giving in years. While the rules for tax professionals are full of dense jargon, here is the simple version of what this means for your wallet and your favorite causes.
- The Good News for Most People (Non-Itemizers)
If you usually just take the Standard Deduction (like about 90% of Americans), you haven’t been able to write off your donations for a while. That is changing.
- New “Above-the-Line” Deduction: Starting in 2026, even if you don’t itemize, you can deduct up to $1,000 (single) or $2,000 (married) for cash gifts.
- Standard Deduction is Higher: For 2025, the standard deduction is jumping to $15,750 for singles and $31,500 for joint filers. This means you keep more of your paycheck before taxes even start.
- Catch: To get the special $1,000/$2,000 deduction, you must give cash (checks or credit cards are fine) directly to a charity. Giving through a Donor-Advised Fund (DAF) doesn’t count for this specific “standard filer” bonus.
- The “Deductible” Concept (Itemizers)
If you give a lot and plan to itemize, there is a new “hurdle” you need to clear starting in 2026.
- The 0.5% Floor: Think of this like a deductible on your car insurance. You can only start writing off donations after they exceed 0.5% of your income (AGI).
Example: If you make $100,000, the first $500 you give isn’t deductible. If you give $2,000 total, you only write off $1,500.
- Strategy Tip: If you usually give small amounts every year, you might want to “bunch” your giving—give a larger amount every other year—so you blow past that 0.5% hurdle and get a bigger tax break.
- Changes for High Earners
If you are in the top tax bracket (37%), the “discount” on your giving is getting a slight trim.
- Maximum Benefit Cap: Starting in 2026, your tax deduction is capped at 35%. Previously, a $1,000 gift might have saved you $370 in taxes; now, it will save you a maximum of $350.
- Permanent 60% Limit: The rule allowing you to deduct cash gifts up to 60% of your income is now permanent, which is great for major donors.
- New Education Credit
OBBBA introduced a new $1,700 tax credit for donations made to “Scholarship Granting Organizations.”
- Credit vs. Deduction: A deduction lowers the income you are taxed on, but a credit is a dollar-for-dollar reduction of your actual tax bill. This is a very powerful way to support local K-12 scholarships.
Important Dates to Remember
| Tax Year | What Happens? |
| 2025 | Last year for the “old” rules. If you want to avoid the 0.5% floor and get the full 37% benefit, consider making your big donations this year. |
| 2026 | The new rules kick in. The $1,000/$2,000 deduction for non-itemizers starts, and the 0.5% floor for itemizers begins. |