New Tax Laws and Your 2025 Year

New Tax Laws and 2025 Year-End Giving

Newsflash for your donors: Now may be the time to give big.

The One Big Beautiful Bill Act (OBBBA), passed in July 2025, spells changes for the relationship charitable donations will have with taxes in 2026.

That means that, depending on someone’s tax bracket, 2025 year-end donations could put more money in donors’ pockets than they will next year.

The Main Takeaways:

1. The New Ceiling - If you’re a high earner and itemizer, you will face a charitable deduction benefit cap of 35% beginning in 2026. For example, a $10,000 gift that generates $3,700 in tax savings now will generate only $3,500 next year.
2. The New Floor - Again for the itemizers, you will only be able to deduct donations that exceed 0.5% of your adjusted gross income.
3. Universal Deduction - In 2026, those who take the standard deduction (most of us) can deduct up to $1,000 for single filers and $2,000 for joint filers in cash donations to qualifying charities.

Considerations in Donating

• For itemizers, consider front-loading large gifts you had planned to space out through the future to year-end 2025 before the cap goes into effect.
• For itemizers, instead of spacing out smaller gifts, consider bunching them either into year-end 2025 or into one tax year in the future to make sure you clear the floor and get the maximum benefits.
• For non-itemizers, consider maxing out the allowable amount in donations each year to get the full deduction. Depending on how much you are giving, 2026 may provide higher benefits than before.

Of course, donors should be sure to consult a financial advisor with questions on their specific tax situation. However, these key points could be helpful to send out to your donor community as we head into the 2025 year-end giving season.

This appeal may just land you some larger donations than you were expecting from itemizing supporters to close out the year, and it also could help line up a steady stream of larger donations from standard deduction supporters in 2026 and beyond.