Charitable Giving Strategies Before 2026: Maximize Tax Benefits While Supporting Causes You Care About

Overview

Charitable giving supports nonprofits and can provide valuable tax benefits for eligible donors. Under current law (through 2025), taxpayers generally deduct charitable gifts only if they itemize. Significant changes beginning in 2026 will reshape how charitable contributions are deducted, including new deductions for non‑itemizers, limits on itemized deductions, a floor on deductible contributions, and a cap on the value of deductions for high‑income filers. Strategic giving in 2025 can help taxpayers maximize tax benefits before these new rules take effect. 

Current Rules Through 2025

Itemized Deduction Limits

• Taxpayers who itemize can generally deduct cash contributions up to 60% of adjusted gross income (AGI) to qualified public charities. 

Non‑Cash Donations

• Non‑cash contributions (e.g., appreciated property) are subject to 30%, 50%, or 60% of AGI limits depending on the asset type and recipient organization. (IRS rules) 

Standard Deduction Impact

• Taxpayers taking the standard deduction currently cannot deduct charitable gifts unless they itemize. 

Qualified Charitable Distributions (QCDs)

• Individuals aged 70½ and older can make QCDs from IRAs up to annual limits (e.g., ~$108,000 for 2025, indexed) that exclude amounts from taxable income and do not require itemizing. This can reduce AGI and may affect tax surtaxes. 

Key Changes Starting in 2026

New Deduction for Non‑Itemizers

• Beginning in 2026, taxpayers who do not itemize will be able to claim an above‑the‑line charitable deduction for cash gifts to qualified public charities:
  • Up to $1,000 for single filers
  • Up to $2,000 for married joint filers
  This does not apply to contributions to donor‑advised funds or private foundations. 

0.5% AGI Floor for Itemizers

• Starting in 2026, taxpayers who itemize can only deduct the portion of charitable gifts that exceeds 0.5% of their AGI. This means the first 0.5% of AGI in donations is not deductible for itemizers. 

Cap on Deduction Value for High‑Income Filers

• For taxpayers in the highest federal bracket, the tax benefit from itemized charitable deductions will be limited to 35% of the donation, rather than the current 37% marginal benefit. 

Carryforward Rules

• Excess contributions that are not fully deductible due to AGI limits may still be carried forward for up to five years, but the new floor applies when using carryforwards. 

Why Giving Before 2026 May Be Beneficial

Itemizing Still More Favorable in 2025

• Under current rules through 2025, itemizers can deduct charitable gifts without a 0.5% AGI floor and without caps on the deduction value for high earners, making 2025 a potentially more generous year for deductions. 

Bunching Strategies Still Effective

• Donors can “bunch” multiple years of giving into 2025 to exceed the standard deduction threshold and maximize their itemized deductions before the 2026 deduction floor and cap take effect. 

Charitable Giving Strategies (2025–2026)

Cash Donations

• Direct cash gifts to qualified public charities remain straightforward and deductible up to existing limits when itemizing. 

Donor‑Advised Funds (DAFs)

• Contributing appreciated assets or cash to a DAF in 2025 allows donors to take a current tax deduction while deciding later which charities benefit. Note: the new non‑itemizer deduction in 2026 does not apply to DAF contributions.

QCDs (IRA Charitable Distributions)

• QCDs remain a valuable way to reduce taxable income above the line and are unaffected by the 0.5% AGI floor for itemizers starting in 2026. 

Non‑Cash Contributions

• Donating appreciated property may yield favorable tax treatment but remains subject to AGI limits and the 0.5% floor for itemizers beginning in 2026.

Standard Deduction Donors

• Starting in 2026, even donors who take the standard deduction will benefit from a cash‑gift deduction of up to $1,000/$2,000 without itemizing, giving broader access to tax benefits.

Record‑Keeping Tips

• Retain written acknowledgments from charities showing amounts and dates of gifts.

• Document appraisals for non‑cash donations as required by IRS rules.

• Track IRA QCD transactions carefully to ensure proper tax reporting.

Conclusion

This updated charitable giving overview reflects current law through 2025 and the new charitable deduction rules effective in 2026. Key upcoming changes include:

• A new deduction for non‑itemizers in 2026;

• A 0.5% AGI floor on itemized deductions;

• A 35% cap on the benefit for high‑income donors; and

• Continuation of income percentage limits on charitable gifts. 

Strategic gifts made in 2025, especially using bunching or donor‑advised funds, can help maximize tax benefits before the 2026 rules take effect.