Changes to Charitable Giving and Itemized Deductions in 2026

The One Big Beautiful Bill Act (“the Act”) provided many updates, and we want to remind you of the changes made to charitable giving in 2026. Changes include an increase in deductions for individuals who do not itemize, a new floor for those who do itemize and limits for taxpayers in the top 37% tax bracket.

Charitable Contribution Deduction for Non-Itemizers

Taxpayers that do not itemize deductions on their tax return may be eligible for a charitable deduction for donations made in 2026 onward. The deduction is limited to $1,000 in cash donations for an individual or $2,000 for joint filers.

Keep in mind that this applies only to cash contributions made to a public charity and excludes donor-advised funds and private non-operating foundations.  

In addition, these charitable donations are deductible after AGI is computed, as a below‑the‑line deduction in arriving at taxable income.

To verify an organization’s tax-exempt status, visit the IRS website and use their Tax Exempt Organization Search Tool.

New Floor for Itemized Tax Deductions

For individuals who itemize deductions on their tax return, they may deduct charitable contributions that exceed 0.5% of their AGI.

For example, with a $300,000 AGI, the floor will be $1,500. If a $2,000 donation is made, only $500 – the amount in excess of 0.5% – may be deducted.

Top Tax Bracket Taxpayers – Itemized Deduction Limitation

For high-income taxpayers in the 37% marginal tax bracket, the Act reduces the itemized deductions by 2/37ths of the lesser of total itemized deductions or the taxable income that exceeds the 37% bracket income threshold. 

This change effectively reduces the federal tax benefit for affected taxpayers that itemize to 35%.

Questions?

As always, should you have questions on this or other matters affecting you or your business, please call 215.675.8364 or email us to speak with a CPA today.

DISCLAIMER: All communications by Wouch, Maloney & Co., LLP intend to provide general information, as of the date of the communication, and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. Please be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.