Beginning in 2026, several important changes to the tax treatment of charitable donations will take effect, which may impact your end of year decision making:
1. A new 0.5% adjusted gross income “floor” is applied to individuals who itemize their deductions. This means that only the portion of your total contribution which exceeds this floor will be included in your total itemized deductions. For example, if your total household adjusted gross income is $500k, then only the portion of your charitable contributions which exceeds $2,500 will be deductible.
2. For individual taxpayers with adjusted gross income above the 37% tax bracket (approximately $640k for single filers and $768k for married filing jointly), the total remaining contributions subject to a limit of 60% of your adjusted gross income, will now be “capped” at 35% of the dollar amount (previously 37%). If you are subject to this cap, a donation of $10,000 will provide $3,500 of tax savings in 2026 compared to $3,700 in 2025.
3. Itemized deductions are now subject to a “2/37 limitation”, which means that high-income taxpayers must reduce their total allowable itemized deductions by 2/37 (5.4%) of the lesser of (1) their total itemized deductions, or (2) the amount by which their taxable income exceeds the threshold for the 37% tax bracket (approximately $640k for single filers or $768k for married filing jointly). For example, if a joint filer in 2026 has taxable income of $900,000 and itemized deductions of $100,000, and the 37% bracket starts at $768,700, the excess is $131,400. The reduction is 2/37 of the lesser of $100,000 or $131,400, so 2/37 × $100,000 = $5,405. So, the allowed itemized deduction is $94,595. The important thing to understand is that, if your taxable income exceeds the 37% tax bracket, your total itemized deductions, which includes charitable contributions, will be subject to a limitation.
4. For those who do not itemize their deductions, you can now deduct up to $1,000 ($2,000 for joint filers) of your total contributions. This only includes cash donations to public charities and cannot be made to a donor advised fund (DAF).
With this in mind, it may benefit you to “bunch” your charitable contributions into the current tax year. Below is a summary showing the difference between charitable deductions in 2025 versus 2026.
Summary Table
| Change | 2025 | 2026 |
| Non‑itemizer charitable deduction | None | $1,000 / $2,000 above-the-line deduction |
| Itemized charitable deduction floor | None | 0.5% AGI floor applies |
| High-income deduction cap | No cap | Capped at 35% of gift value |
| Standard deduction | Higher under OBBBA | Remains high → fewer itemizers |
Using a donor-advised fund (only for those who itemize) is a common way to do this, allowing for an immediate deduction in the year of contribution while distributing funds to charities in future years.
All contributions must be made by December 31st.
Please contact our office with any questions.