What the New Tax Law Means for Your Giving

For the first time since 2021, non-itemizers will get a tax break for charitable giving. Even if you don’t itemize on your federal taxes, you can deduct up to $1,000 (single filers) or $2,000 (married couples) for your charitable gifts each year, so even smaller donations can make an impact. Note: Gifts to Donor Advised Funds are excluded from this deduction.

Currently, top earners get a 37-cent tax benefit for every $1 deducted. Starting in 2026, deductions will only offset taxes at a 35% rate, even for donors in the 37% tax bracket.

While you can still deduct your charitable gifts in 2026, new limits apply. Starting in 2026, only the amount of your charitable giving that exceeds 0.5% of your adjusted gross income (AGI) will be deductible. To avoid the new floor, consider maximizing your giving in 2026, including “bunching” multiple years of giving into 2026. This may include establishing or making new gifts to a Donor Advised Fund which are deductible at the time they are added to a DAF.

The new law permanently extends the existing ability to deduct up to 60% of AGI for cash contributions to 501(c)(3) public charities like BB&N.

The new law permanently extends the current tax rates. Effective in the 2025 tax year, income tax brackets are: 10%, 12%, 22%, 24%, 32%, 35%, 37%.

For 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly, with future amounts indexed for inflation.

Beginning in 2025, the limit on deductions for SALT (State and Local Tax) payments, including mortgage interest and real estate taxes, has been increased from $10,000 to $40,000 for donors making up to $500,000. After 2025, the cap will increase by 1% through 2029, then reset to $10,000. This may make it more advantageous to itemize deductions this year rather than taking the standard deduction.

Gifts of appreciated securities that you have owned for at least one year are deductible at the fair market value at the time of the donation, based on the above limits, and avoid capital gains taxes if you sold the stock.

If you are age 70 1⁄2 or older, you can maximize your impact and minimize your taxes by making a gift directly from your IRA to charities like BB&N. These gifts are called Qualified Charitable Distributions (QCDs) and reduce your taxable income, although such gifts are not deductible.

In 2026, taxpayers can make QCDs of up to $111,000 (adjusted annually for inflation) from your IRA to charities. If you’re 73 or older and must take a Required Minimum Distribution (RMD), a QCD will also satisfy some or all of your RMD, thus reducing your taxable income.

If you itemize, consider accelerating your giving before December 31, 2025, to maximize your deductions. Gifts made this year qualify for full deductions rather than only the amount above the new 0.5% floor of AGI.

• You may benefit from “bunching” multiple years of gifts in 2025 to avoid the new 35% deduction cap.
• Making a gift with appreciated securities rather than cash continues to be a tax-efficient way to support BB&N and other organizations you care about.
• If you’re age 70 ½ and older, you can maximize your impact and minimize your taxes by making a gift directly from your IRA through a Qualified Charitable Distribution, which bypasses the new AGI and the deduction cap.

Contact Linda Gallinaro, lgallinaro@bbns.org or 617-800-2721. We’d be happy to discuss the best giving opportunities for your financial circumstances.