Beginning with the 2025 and 2026 tax years, several changes to federal tax law could affect how your charitable gifts are treated. Below are highlights with examples to show how they may apply.
Standard Deduction and Charitable Giving — Starting in 2026, taxpayers who take the standard deduction can also deduct up to $1,000 (or $2,000 for couples) in cash contributions to qualified public charities.
Example: If you and your spouse give $2,000 in 2026 and don’t itemize, you can deduct the full amount. This is not available in 2025.
New Deduction Thresholds — From 2026 onward, charitable deductions will only apply to giving above 0.5% of your adjusted gross income (AGI).
Example: If your AGI is $500,000, the first $2,500 of charitable contributions won’t be deductible. A $5,000 gift would yield a deduction on $2,500.
Deduction Cap for High-Income Taxpayers — For those in the top tax bracket, the value of charitable deductions will be capped at 35% beginning in 2026.
Example: A $100,000 gift would reduce taxable income by $35,000 rather than $37,000 under new rules.
Expanded SALT Deduction — Beginning in 2025, the cap on the state and local tax (SALT) deduction will rise from $10,000 to $40,000 and remain in place through 2029 (with small annual inflation adjustments). This higher cap begins to phase out for households with a modified adjusted gross income (MAGI) above $500,000 and may be reduced or eliminated at higher income levels.
Example: Under the old rules, if you paid $25,000 in state and local taxes, you could only deduct $10,000. Starting in 2025, you could deduct the full $25,000—an extra $15,000 deduction—if your household income is under the $500,000 threshold. If your MAGI is above $500,000, the benefit will shrink as income rises and may eventually phase out entirely.
We encourage all donors to consult their financial advisors to determine the best strategies for their situation.