Tax Law Changes
JFS is here to help you understand how changes from H.R. 1 (One Big Beautiful Bill Act) will affect your philanthropy in 2026 and why giving more in 2025 may be beneficial.
There are three key provisions to consider when making charitable contributions now and in the future:
1. New limit on charitable deduction value
Starting in 2026, taxpayers in the highest (37%) federal income tax bracket will see the value of their charitable deduction benefits capped at 35% when itemizing their deductions. For example, a $10,000 gift that currently generates a $3,700 tax savings would be limited to $3,500 under the new cap.
What you can do:
Consider front-loading donations to year-end 2025 to lock in the full 37% deduction value before the cap takes effect. For example, making a five-year commitment of $100,000 and giving it all now, rather than donating $20,000 per year for the next five years.
2. Higher deduction floor for itemizers
Also starting in 2026, itemized charitable deductions will only apply if your total donations exceed 0.5% of your Adjusted Gross Income (AGI), so smaller donations may no longer reduce your tax bill unless they clear this new threshold. For example, if your AGI is $200,000, only gifts of $1,000 or more would be deductible.
What you can do:
Bunch gifts: If you are contemplating a large gift to charity in 2026 or later, consider combining several years’ worth of donations into one tax year, particularly in 2025, to clear the deduction floor.
Look at all of your assets: Donating appreciated stock, life insurance policies, and other non-cash assets may help you exceed the floor and unlock additional tax advantages, such as avoiding capital gains taxes.
Also, if you or your spouse are over the age of 70 ½, consider utilizing qualified charitable distributions (QCDs) from Individual Retirement Accounts (IRAs), up to $108,000 this year from each of your individual accounts or $216,000 total from both accounts.
3. Universal deduction for non-itemizers
Also beginning in 2026, a reinstated deduction allows non-itemizers to deduct cash donations to charity—up to $1,000 for single filers or $2,000 for married couples filing jointly.
What you can do:
Consider contributing the full allowable amount each year to claim the deduction. Also, many employers will match charitable donations up to certain limits, so check with your employer to see if they can add to your gift.
As always, please consult with your trusted tax and financial advisors to find a plan that aligns with your values and goals and takes your whole economic picture into account. If you have any questions about JFS and our programs, please contact the JFS Development staff at donations@jewishfamilyservice.org to learn more.
References:
https://www.fidelitycharitable.org/articles/obbb-tax-reform.html
https://www.dafgiving360.org/tax-law-changes
https://www.bernstein.com/our-insights/insights/2025/articles/give-early-save-more-beat-the-new-charitable-floor-before-it-starts.html
https://www.nptrust.org/philanthropic-resources/philanthropist/navigating-charitable-giving-in-the-wake-of-new-tax-reform/