Should You Accelerate Your Charitable Giving Before Next Year’s Big Tax Changes?

If charitable giving is part of your financial plan, it’s time to pay attention. Quietly tucked into the recently passed One Big Beautiful Bill Act are a series of changes that could dramatically reshape how donors benefit from giving--some for the better, others for the more complicated.

The good news? These new provisions don’t take effect until 2026. That gives you time to plan ahead and potentially make some strategic decisions about when and how you give.

Here’s what’s changing, who’s affected, and what it could mean for your giving strategy.

First, a Little History

Back in 2017, the tax overhaul nearly doubled the standard deduction and capped the SALT (state and local tax) deduction at $10,000. As a result, millions of taxpayers stopped itemizing altogether. That had an unintended side effect: fewer people got a tax break for charitable giving.

Between 2017 and 2019, itemized charitable deductions dropped by over $66 billion, a 26% decline, according to data from the Giving USA Foundation.

The new law attempts to strike a balance by offering more flexibility for non-itemizers, while introducing new limits for those who do itemize.

What’s Changing in 2026

A New Deduction for Non-Itemizers

Starting in 2026, if you don’t itemize, you’ll be able to claim an annual deduction of:

$2,000 for married joint filers
$1,000 for single filers

This is a simplified version of a pandemic-era rule, and it could make charitable deductions accessible to nearly 100 million taxpayers who otherwise wouldn’t qualify.

However, there are some limitations:

The gift must be cash only (no stock, clothing, or household items).
It must go to a qualified public charity, not a donor-advised fund (DAF) or supporting organization.
It reduces taxable income, but not AGI, which still matters for things like Medicare IRMAA, Roth IRA eligibility, and the 3.8% surtax on investment income.

The 0.5% Disallowance for Itemized Giving

For those who do itemize, there’s a new haircut: 0.5% of your adjusted gross income (AGI) will be subtracted from your eligible charitable deduction.

Example:
If your AGI is $225,000, you’ll lose the first $1,125 of charitable deductions.
So a $2,000 donation would only yield an $875 deduction.
But if you donate $5,000, your deduction becomes $3,875. You still lose the same $1,125, but a smaller percentage overall.

This rule effectively penalizes small-to-mid-sized itemized donations, nudging donors either to increase giving, bunch donations, or opt for the simplified deduction.

A Reduced Benefit for Top-Bracket Taxpayers

If you’re in the highest federal tax bracket—currently 37%—you’ll only be allowed to claim itemized deductions, including charitable ones, at 35%.

Combined with the 0.5% disallowance, this can significantly reduce the value of your deduction.

Example:
A couple with $900,000 of AGI who donates $100,000 could see their tax benefit drop by over $3,500 compared to 2025 just due to these two rule changes.

What to Do Now: Strategy Before 2026

If you’re charitably inclined, now’s the time to think strategically. Consider:

Accelerating Donations Into 2025

If you itemize, making larger gifts this year could yield more valuable deductions before the new limits kick in.
High earners may want to frontload gifts to avoid the loss from the 35% cap.

Using Donor-Advised Funds (DAFs)

A DAF lets you contribute a large sum in 2025, capture the full deduction under current rules, and distribute gifts over time in future years.

Giving with Qualified Charitable Distributions (QCDs)

If you’re 70½ or older, QCDs from IRAs remain untouched by these new changes, and continue to be one of the most tax-efficient ways to give.
QCDs reduce AGI directly, which can lower Medicare premiums and avoid other phaseouts.

Reevaluating Whether to Itemize

Depending on your income, mortgage interest, and SALT deductions, itemizing may or may not be worth it going forward.
Some filers may benefit from bunching charitable gifts every few years to exceed the standard deduction.

Bottom Line

The rules around charitable giving are about to change. While some donors may benefit from the expanded deduction for non-itemizers, others—particularly high earners and those who give smaller annual amounts—could see their tax breaks shrink.

Whatever your giving goals, it’s worth getting ahead of these changes now. The more strategically you give, in both timing and structure, the more impact your generosity can have, both on your causes and your tax return.