/>iThe One Big Beautiful Bill Act includes a game-changing shift in how charitable contributions are treated for both itemizers and non-itemizers.
For the first time in years, non-itemizers can claim a charitable deduction: up to $1,000 for single filers or $2,000 for married couples filing jointly. This deduction could open the door for broader participation in charitable giving for those who take the standard deduction.
But the bigger change is for itemizers. Starting in 2026, a 0.5% floor will apply to charitable deductions. That means only the portion of a taxpayer’s charitable contributions that exceeds 0.5% of their adjusted gross income (AGI) will be deductible. For corporations, the floor is 1%, and the deduction remains capped at 10% of taxable income
This could have a chilling effect on smaller, scattershot giving. The popular $10, $20, or $50 donations to support multiple charities may no longer be deductible unless they collectively exceed the new threshold.
That’s why the remainder of 2025 is critical for planning. Taxpayers who itemize may want to consider front-loading their charitable giving this year. One effective strategy is for people who want to make charitable gifts to contribute to set up and then contribute to a donor-advised fund (DAF) in 2025. This allows donors to take the full deduction under current rules, while distributing funds to charities over time—even after the new floor kicks in 2026.
For clients who are charitably inclined, this is the year to act. Advisors, CPAs, and estate planning attorneys should be talking to clients now about how to optimize their giving strategies before the law changes.
Charitable contribution deduction: The act creates a charitable contribution deduction for taxpayers who do not elect to itemize, allowing nonitemizers to claim a deduction of up to $1,000 for single filers or $2,000 for married taxpayers filing jointly for certain charitable contributions. For itemizers, the act imposes a 0.5% floor on the charitable contribution deduction: The amount of an individual’s charitable contributions for a tax year is reduced by 0.5% of the taxpayer’s contribution base for the tax year. For corporations, the floor will be 1% of the corporation’s taxable income, and the charitable contribution deduction cannot exceed the current 10%-of-taxable-income limit.
