How Tax Changes Could Impact Your Charitable Legacy

This summer, Congress passed the One Big Beautiful Bill (OBBB) Act, signed into law July 4, 2025, introducing sweeping changes across taxes, spending, and estate policy. Some of these provisions offer powerful new planning opportunities and creative strategies to support causes you care about for generations to come.

What’s New and What It Could Mean for Your Giving

1. A New Deduction for Cash Gifts by Non-Itemizers

Starting in the 2026 tax year, donors who take the standard deduction will benefit from a new, above-the-line charitable deduction:

• Up to $1,000 for those filing as an individual.
• Up to $2,000 for those filing jointly.

Important: this does not apply to gifts made to donor-advised funds or private foundations.

Why this matters: Many donors don’t itemize. This makes giving more accessible, helping extend your philanthropic reach without adding extra paperwork.

2. Deduction Caps and a New Floor

Itemizing donors also face changes:

• The maximum tax benefit for charitable gifts is now capped at 35% for donors in the top 37% bracket.
• A floor kicks in: only contributions exceeding 0.5% of your adjusted gross income (AGI) are deductible.

Why this matters: Planning strategies like “bunching” contributions (e.g., multiple larger gifts in one year) may be more effective than ever, especially with a donor-advised fund offering flexibility to time support as you wish.

3. Timing Is Everything

Because some benefits are permanent while others are temporary or have thresholds, timing your charitable gifts, especially before certain rules take effect, can maximize impact.

What to consider:

• Accelerating contributions before 2026 may let you take advantage of currently higher exemption limits.
• Meanwhile, the above-the-line deduction starting in 2026 opens doors to more donors, even those using the standard deduction.

As always, it is best to work with your advisor to time your gifts and choose the right vehicles, be it a donor-advised fund, bequest, or other, and ensure your giving flows when and how it’s most meaningful.

Click here to learn about more Ways to Give to Camp Ondessonk.