Key Charitable 2026 Tax Changes & What They Mean for You
- Joe Lyons
- 3 days ago
- 3 min read
Happy 2026!
As we look ahead to 2026, several charitable tax updates are coming into play. Below is a streamlined overview to help you understand what’s changing and what to keep an eye on.
New IRS guidance and recently enacted One Big Beautiful Bill (OBBBA) legislation are rolling out now, with many provisions impacting the 2025 and 2026 tax years. This newsletter highlights key updates, planning considerations, and actions worth considering as you head into the new year.
If you’d like to discuss how these changes may affect your organization, donor strategy, or planning for 2026, please feel free to reach out.
Thank you,
Marie Lyons, CPA
What’s Changing Beginning January 1, 2026
Two notable updates will affect how charitable contributions are deducted:
Standard deduction donors will be allowed to deduct limited charitable gifts in addition to the standard deduction.
Itemizing donors will be subject to a new 0.5% AGI floor and additional caps, which may reduce the tax benefit of larger gifts—particularly for high-income donors.
What This Means for Donors
Donors (Taxpayers Using the Standard Deduction)
Beginning in 2026, charitable donations may be deducted in addition to the standard deduction, up to:
$1,000 (single filers)
$2,000 (married filing jointly)
This creates a new tax incentive for smaller and mid-level donors, many of whom previously received no tax benefit for charitable giving.
Major Donors (Taxpayers Using the Itemized Deduction)
Charitable deductions apply only to gifts that exceed 0.5% of adjusted gross income (AGI). In practical terms, this means the first $500 of giving for every $100,000 of AGI is not deductible, and only contributions above that threshold qualify for a tax deduction.
For taxpayers in the highest 37% tax bracket, the overall tax value of itemized deductions is capped at 35 cents per dollar, further limiting the tax benefit of large gifts. (Tax Foundation)
As a result, some donors may prefer to accelerate or “bunch” gifts into 2025 before these limits take effect.
Planning note: Donor-advised funds (DAFs) remain a useful tool for pre-funding charitable gifts under current rules. Donors planning significant contributions may want to consider accelerating gifts by December 31, 2025, and coordinating DAF strategies accordingly. (Kiplinger)
What This Means for Nonprofit Organizations
Boards and leadership teams should expect increased donor interest in:
Accelerating gifts into 2025
Donor-advised funds (DAFs)
Gifts of appreciated assets
These shifts may affect the timing and predictability of cash flow between 2025 and 2026.
Board-Level Action Items
Encourage early conversations with major donors about gift timing and structure.
Approve donor communications that clearly explain the new deduction rules.
Donor Communication Considerations
Donors Using the Standard Deduction
Create marketing materials to communicate and educate donors about the new charitable deduction limits.
Clearly communicate the $1,000 / $2,000 deduction limits available in addition to the standard deduction, beginning in the 2026 tax year.
Major Donors Using the Itemized Deduction
Proactively discuss timing shifts, including bunching gifts into 2025.
Plan liquidity and communications accordingly.
Remind donors that excess charitable contributions may be carried forward to future tax years if they exceed annual IRS limits.
Promote planning strategies such as gifts of appreciated assets, DAFs, or other planned-giving vehicles.
Sample Donor-Facing Language
(For newsletters, year-end appeals, or donor communications)
Charitable Giving Tax Updates — Looking Ahead to 2026
Starting in 2026, new tax rules will change how charitable contributions are deducted—and may create new planning opportunities for donors at all giving levels.
Donors who take the standard deduction may deduct charitable gifts of up to $1,000 (single) or $2,000 (married filing jointly), even if they do not itemize. Donors who itemize, particularly those making larger gifts, may see reduced tax benefits beginning in 2026 due to new deduction thresholds and limits.
For donors considering significant contributions, 2025 may present a planning opportunity to accelerate or consolidate gifts before these changes take effect. Options such as donor-advised funds or gifts of appreciated assets may also be worth discussing with your tax advisor.
Disclaimer: This newsletter is for informational purposes only and does not constitute legal, tax, or financial advice. Forza CPA, PLLC makes no warranties regarding the accuracy, completeness, or timeliness of the information provided. Clients should not act solely on the basis of this material. Tax laws and regulations are subject to change, and the application of these laws may vary depending on individual circumstances.
Please consult your qualified tax advisor or legal professional before making any decisions based on this information.
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