Charity Tax Breaks Are About To Change
Got a favorite charity? The tax break you get for supporting it is about to change.
Starting in 2026, new rules buried in President Trump's tax package will shake up how charitable deductions work. Some folks will win, others will lose, and everyone needs to pay attention.
Finally, Some Good News for Regular Filers
During COVID, the government let people who take the standard deduction write off $300 in charitable cash gifts. Sweet deal, but it expired. Now it's coming back even better.
Single filers can deduct up to $1,000 in cash donations. Married couples get $2,000. And you still get to take the standard deduction on top of that.
But here's the kicker—only direct cash gifts to real 501(c)(3) charities count. Those fancy donor-advised funds where rich people park money won’t fly. Private foundations are also a no. Only cash to actual charities qualifies, says Tom O'Saben from the National Association of Tax Professionals.
Itemizers Get The Shaft (A Little)
If you itemize, prepare for annoying new math. Congress decided you shouldn't get tax breaks on every dollar you donate anymore. Now you can only deduct what exceeds 0.5% of your adjusted gross income.
Let's say you make $100,000. The first $500 you donate might as well be invisible to the IRS. Give your church $2,000, and only $1,500 counts for tax purposes.
And that existing rule where you can't deduct more than 60% of your income? It’s still there. So now your donations need to thread the needle—more than 0.5% but less than 60% to count.
The Five-Year Shuffle
At least they're throwing itemizers a bone. This means if you can't deduct everything this year you can carry it forward for up to five years.
Here's where it gets weird though. Say you donate $65,000 on that $100,000 salary. You can carry forward the first $500 (below the floor) plus the $5,000 that went over the 60% ceiling. Because apparently making tax rules simple would be too easy.
And no, you can't claim both the standard deduction bonus AND itemize. The IRS isn't that generous.
Rich People Problems
In the 37% tax bracket? Your charitable deductions just got devalued. The government will pretend you're only in the 35% bracket when calculating your deduction's worth.
Real world impact: That $10,000 donation used to save you $3,700 in taxes now saves $3,500. Every $10,000 you donate, you lose $200 in tax benefits. These might be first world problems, but it’s still annoying if you're counting on those deductions.
Your Old Clothes Are Worthless (Tax-Wise)
Those garbage bags full of donations for Goodwill are worth exactly zero on your taxes if you take the standard deduction. The new $1,000/$2,000 break is cash only.
Even itemizers get hit—that 0.5% floor applies to your old furniture and clothes too which means so much for feeling virtuous about decluttering.
Now What?
These changes reshape the donation game. Middle-class families taking the standard deduction actually win—they get a new tax break they didn't have before.
Big donors and wealthy folks are the ones that reallt need to pay attention. They're getting squeezed by the new floor and the reduced deduction value.
Some people might start "bunching" donations—instead of giving $1,000 yearly, dump $5,000 into one year to clear that 0.5% hurdle. Others might just shrug and keep giving because they actually care too much about their causes, not the tax break.
The Real Bottom Line
Charitable giving still gets you tax breaks, just different ones with more hoops to jump through. If you've been donating strategically for tax purposes, it’s time to revisit that strategy. If you donate because you genuinely want to help, keep doing your thing—just know the tax math is changing.
You've got until 2026 to figure this out. Maybe talk to a tax person if you're a big giver. Or just accept that doing good might cost a bit more going forward.