Key tax changes impacting philanthropy
As a result of the One Big Beautiful Bill Act, passed in July 2025, some key changes may impact your philanthropy in 2026 and beyond.
1. For donors who will be taking the standard deduction:
The standard deduction has increased:
- Single or Married Filing Separately — $15,750
- Head of Household — $23,625
- Married Filing Jointly or Qualifying Surviving Spouse — $31,500
Charitable gifts are no longer entirely restricted from the standard deduction.
Single donors can deduct up to $1,000; married couples up to
$2,000.
2. For donors who itemize their deductions:
A “floor” of 0.5% has been implemented on the deductions a donor can take for a charitable gift.
Example: If your Adjusted Gross Income (AGI) is $200,000, the first $1,000 you give will not be deductible. Only giving above that amount will qualify.
3. Estate Taxes and Gift Tax Exemption
The federal estate and gift tax exemption rises to $15 million per person (indexed for inflation), meaning very few estates will owe federal estate tax.
These laws differ from state to state. The threshold for state taxes might be lower depending on where you live.
4. Non-cash giving vehicles (QCDs, Stocks, or grants from Donor-Advised Funds) are beneficial ways to give more while seeing additional tax benefits. Capital appreciation, when appreciated items are donated to a tax exempt organization, are not subject to capital gains taxes or income taxes.
5. For donors with large estates, planned giving and legacy gifts may offer additional benefits, despite the changes.
This is information only, not legal advice. You may wish to seek the advice of a tax advisor.
This information comes to you courtesy of Freewill
