Year-End Charitable Giving: What to Do Now (and What to Wait For) Under the One Big Beautiful Bill Act
As the year winds down, many people start thinking about charitable giving. For some, it is about supporting causes they care about. For others, it is about managing taxes. For many, it is both.
This year, both motivations matter even more. The One Big Beautiful Bill Act (OBBBA) brings several upcoming changes to how charitable gifts are treated for tax purposes. Since most of those rules begin in 2026, there’s still time to use the current laws to your advantage. The right timing could make a meaningful difference in both your giving and your tax picture.
What’s Changing in 2026
A new deduction for non-itemizers: Starting in 2026, individuals who take the standard deduction can deduct up to $1,000 (or $2,000 if married filing jointly) in cash gifts to qualifying charities.
A new 0.5% of AGI floor: For itemizers, only charitable gifts exceeding 0.5% of adjusted gross income will be deductible.
For top-bracket taxpayers in 2026 and after, the benefit of itemized deductions is limited so each dollar of deduction is worth about 35 cents rather than your marginal rate. That is roughly a 2-cent per dollar difference from a 37% rate.
The 60% AGI cap remains: Cash donations to public charities are still limited to 60% of AGI.
Together, these changes reshape how the tax benefit of giving works. And because they start in 2026, this coming tax year is a transition period that opens the door for careful planning.
What to Do Before Year-End
Consider bunching donations into 2025
If you typically give annually and you itemize, accelerating next year’s gifts into this year may give you more impact under the current, more favorable rules.
Look at donor-advised funds (DAFs)
A DAF lets you claim a deduction this year but distribute the funds to charities over time. For donors who expect to be affected by the new 0.5% floor or the capped deduction, funding a DAF in 2025 can lock in today’s rules while giving you flexibility later. DAF gifts do not count for the $1,000/$2,000 non-itemizer deduction in 2026.
Revisit appreciated assets
Donating stock or other appreciated investments can still be one of the most efficient ways to give. You avoid capital gains tax on the sale and may deduct the full fair market value if you itemize.
Document everything
This is always important, but with the new changes ahead, good recordkeeping is essential. Keep receipts, acknowledgment letters, and documentation of any non-cash gifts.
Making Bunching Work for You
If your itemized deductions are close to the standard deduction amount, consider “bunching” two years of charitable gifts into one. This approach can make the difference between getting no deduction for your giving and getting full credit for it.
Here are a few examples to illustrate:
Example 1: Near the Standard Deduction
Married couple under 65
Regular itemized deductions: $25,000
Standard deduction (2025): $31,500
Planned annual charitable giving: $6,000
If they give $6,000 each year, their total deductions are about $31,000, just below the standard deduction. They receive no added tax benefit for their giving.
If they bunch $12,000 into 2025 and skip 2026, their deductions rise to $37,000 for 2025, allowing them to itemize that year. In 2026, they take the standard deduction again.
Result: A higher overall deduction over the two-year period for the same amount of giving.
Example 2: Retired Couple with Senior Standard Deduction Plus Senior Add On Plus Senior Bonus
Married couple, both 68
Regular itemized deductions: $23,000
Modified Adjusted Gross Income: Under $150,000
Standard deduction plus senior add on plus senior bonus: $46,700
Planned charitable giving: $20,000
If they give $20,000 each year, they’ll still take the standard deduction and see no tax benefit from the gifts.
If they bunch $40,000 in 2025 and skip 2026, they itemize in 2025 and deduct all $40,000, then return to taking the standard deduction (with the senior increase) in 2026.
Result: Roughly $16,300 in additional deductions across the two years while keeping the senior standard deduction benefit in the off year.
Example 3: Single Non-Itemizer and the New 2026 Rules
Single taxpayer
Typical deductions: $10,000
Standard deduction: $15,750
Currently, they take the standard deduction and receive no benefit for charitable gifts. Starting in 2026, they’ll get a $1,000 deduction for cash gifts even if they don’titemize.
If they plan a large, one-time gift (such as $5,000 to a DAF), it may make more sense to do it in 2025 under the current rules for full deductibility rather than waiting for the smaller 2026 non-itemizer benefit.
Note: Gifts to DAFs do not qualify for the $1,000 cash gifts for non-itemizers.
Example 4: Modest Givers
If you don’t itemize and your giving is modest, you might benefit from waiting until 2026 to take advantage of the new $1,000 or $2,000 deduction.
How We Can Help
The end of the year is the best time to review your charitable strategy and project how next year’s new rules will change the math. We can help you:
Compare giving now versus later under both tax regimes.
Evaluate DAFs, appreciated asset gifts, and bunching strategies.
Incorporate charitable giving into your retirement and estate plans.
Make sure documentation and timing are handled correctly.
If you want to make the most of your generosity and the current tax landscape, now is the time to talk. The coming changes will reward those who plan ahead.
We can help you see the full picture, not just the numbers, but the purpose behind them. Reach out to review your charitable giving strategy before year-end and make sure your plan fits both your goals and the new tax rules ahead.
