The enactment of the One Big Beautiful Bill Act (OBBBA) this past July will bring changes to charitable deductions in 2026. If you itemize, there are two key provisions that may impact your deductions of future charitable contributions.
Changes in 2026 for itemizers:
- Deduction floor for charitable contributions: The OBBBA establishes a new floor that must be met to itemize deductions for your charitable contributions. Deductions will only be allowed to the extent they exceed 0.5% of your adjusted gross income (AGI). For example, if you have an AGI of $400,000, you’ll only be able to deduct your charitable contributions over $2,000.
- Limitation on tax benefit of itemized deductions: The OBBBA also establishes a new limit on the tax benefit of itemized deductions if you’re in the 37% tax bracket, capping the tax benefit at 35%.
Because of these changes, a charitable gift in 2025 could yield greater tax savings than similar gifts in future years.
Strategies to consider in 2025 for itemizers:
If you’re a high-income taxpayer who plans to itemize deductions in 2025 and 2026, you may want to consider the timing, amount and method of your charitable gifts.
- Bunching: Consider accelerating planned gifts for future years to 2025 to take advantage of the current, more favorable charitable deduction rules. This bunching strategy — in which you make larger gifts with less frequency — can also be used to help you meet the itemized deduction threshold in future years.
- Donor-advised funds: If you bunch your charitable contributions, consider using a donor-advised fund (DAF) such as the Edward Jones Charitable Gift Fund (EJCGF). Your EJCGF account allows you to receive a charitable deduction the year you contribute while distributing the assets to IRS-approved public charities of your choice in future years. Your gift is invested based on your preferences, providing your EJCGF account the opportunity to grow tax free until you choose to make distributions.
If you don’t itemize:
There are changes in 2026 for you, too. A deduction will be available to non-itemizers for charitable contributions made in cash to a qualified charitable organization (which excludes DAFs). The maximum deduction allowed is $1,000 ($2,000 for joint filers). Consider delaying charitable contributions to 2026 if you plan to contribute less than the maximum deduction.
How to donate to Boys & Girls Clubs of San Antonio:
- Check, cash, electronic fund transfer (EFT), credit card
- Gift of stocks or securities
- Donor Advised Fund (DAF)
- IRA
- Planned gift (bequest, charitable trust, life insurance policy, charitable gift annuity (CGA), DAF)
To discuss a year end gift or other contribution, please contact Jessica Smith-Perry, Chief Development Officer, at [email protected].
Thank you for considering Boys & Girls Clubs of San Antonio for your end of year giving. Together, we are building great futures!
