How Charitable Deductions Look Different on Your 2026 Taxes
If you give to charity every year, 2026 is the first tax year where that giving actually works differently under the tax code. The One Big Beautiful Bill Act (OBBBA) made permanent a lot of the rules we’ve gotten used to, but it also introduced new limits specifically around charitable deductions. Whether you itemize or take the standard deduction, here’s what changed and what it might mean.
If You Take the Standard Deduction: A New Deduction Just for You
For years, only itemizers got a tax break for giving to charity. Starting in 2026, that’s no longer true. If you claim the standard deduction, you can now also deduct:
- Up to $1,000 in cash donations to qualified public charities if you’re single
- Up to $2,000 if you’re married filing jointly
This is an “above the line” deduction, meaning you get it in addition to your standard deduction — not instead of it. A few things to know:
- It only applies to cash gifts to public charities. Donations to donor-advised funds, private foundations, or supporting organizations don’t qualify.
- Non-cash gifts (clothing, household items, appreciated stock) don’t count toward this deduction.
If you’ve historically taken the standard deduction and given smaller amounts to charity each year, this is a modest but real win — money you couldn’t deduct before, you now can.
If You Itemize: A New Floor to Clear First
This is the bigger change, and it affects a meaningful number of higher-income households. Starting in 2026, itemizers have to clear a 0.5% of AGI floor before any charitable contribution becomes deductible.
Here’s how it works in practice: take your adjusted gross income, multiply by 0.5%, and that’s the amount of your giving that no longer generates any deduction at all.
Example: Say your AGI is $300,000. The floor is $1,500 (0.5% of $300,000). If you donate $10,000 to charity for the year, only $8,500 of it is deductible — the first $1,500 simply doesn’t count anymore.
For most people who give a modest, steady amount each year, this shaves a little off the top. For high-income households in bigger giving years, it can add up to a real difference in what actually shows up on Schedule A.
An Additional Cap for Top-Bracket Taxpayers
If you’re in the 37% marginal tax bracket, there’s a second layer to be aware of: the tax value of your itemized deductions, including charitable gifts, is now capped at a 35% benefit rather than the full 37%. In effect, the deduction is still there, but it’s worth a little less to you at the very top of the income scale.
This mainly affects taxpayers with taxable income above roughly $625,000 (single) or $750,000 (married filing jointly), so it won’t touch most households — but it’s worth knowing about if you’re in that range.
What This Means for How You Give
None of this means charitable giving stopped making sense in 2026 — it just means the “when” and “how” matter a little more than they used to. A few strategies worth thinking about:
- Bunching contributions. Instead of giving the same amount every year, consider combining two or three years of giving into a single year. This helps you clear the 0.5% floor more efficiently and can push you from the standard deduction into itemizing in that year.
- Donor-advised funds. Pairing a bunching strategy with a donor-advised fund lets you take the deduction in the year you contribute to the fund, while still distributing the money to charities on your own timeline over the following years.
- Appreciated securities. If you’re charitably inclined and holding stock with a large unrealized gain, donating shares directly (rather than cash) still avoids capital gains tax and may be more efficient than ever with these new floors in play.
- Know your number. If you give consistently, it’s worth calculating your personal 0.5% floor so you know roughly how much of your annual giving actually generates a deduction versus how much doesn’t.
The Bottom Line
The rules around charitable giving didn’t get simpler in 2026, but they didn’t get worse across the board either. Non-itemizers picked up a small new benefit, while itemizers — especially those with meaningful annual giving — need to plan a bit more intentionally to get full credit for what they give.
For those unsure how these changes affect their specific situation, or who want help thinking through a bunching or donor-advised fund strategy, that’s exactly the kind of conversation worth having before year-end rather than after.
This post is for general informational purposes and isn’t personalized tax advice. Every situation is different — reach out to discuss how these changes apply to your specific circumstances.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge, a Registered Investment Advisor. Sound Foundation Wealth Advisors and Cambridge Investment Research, Inc. are not affiliated. • The information in this email is confidential and is intended solely for the addressee. If you are not the intended addressee and have received this email in error, please reply to sender to inform them of this fact.
