There are several significant changes to the tax treatment of charitable contributions resulting from the recently enacted One Big Beautiful Bill Act (OBBBA). These updates may impact your charitable giving strategy and tax planning for 2025 and beyond.
Beginning in 2025, the OBBBA makes the above-the-line deduction for charitable contributions permanent. Non-itemizers can now deduct up to $1,000 (single filers) or $2,000 (joint filers) for cash contributions to qualifying charities.
Starting in 2026 the OBBBA introduces minimum “floors” for charitable deductions. For taxpayers who itemize, only charitable contributions exceeding 0.5% of adjusted gross income (AGI) are deductible. For example, with an AGI of $100,000, only the portion of your charitable giving above $500 is deductible.
For tax years starting in 2027, a new federal tax credit of $1,700 will be available for individual contributions to state-approved scholarship granting organizations for K-12 students. This is a direct credit, not a deduction, and may be of particular interest if you are considering supporting educational initiatives.
If you have any questions about how these changes may affect your specific situation or would like to discuss your charitable giving strategy for the upcoming tax year, please let us know. We are happy to assist you in planning to ensure you receive the maximum tax benefit from your charitable contributions.
For more background on charitable contribution rules, you can visit the For more background on charitable contribution rules, you can visit the IRS Charitable Contributions page.
These changes are just one part of the One Big Beautiful Bill Act. To explore related topics, including car loan interest deductions, EV credits, and energy tax incentives, visit our Resources page.
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