In July 2025, the federal government passed a sweeping tax reform bill that has a big effect on charitable giving.

It's important to work with your financial advisor or a tax expert for the best guidance, but here is some information to know:

1. If you don't itemize

Request and keep receipts for your donations in order to claim the new above-the-line charitable deduction (up to $1,000 for single filers and up to $2,000 for joint filers). The deduction is only applicable to cash donations that are made to qualified charitable organizations.

2. If you itemize

There are two new restrictions starting in 2026 for those who itemize deductions.

One of these new restrictions is the 0.5% AGI deduction floor. This means that you can only deduct charitable contributions that exceed 0.5% of your adjusted gross income (AGI).

The other new restriction is a 35% deduction cap for high-income donors. Beginning in 2026, if you are in the highest tax bracket (37%), the value of your deduction is capped at 35%.

(Learn more about what this means.)

3. 2017 Tax Cuts and Jobs Act extensions

In 2025, the federal government extended and made permanent some provisions that were introduced in 2017 with the Tax Cuts and Jobs Act. Those provisions include:

• Higher standard deduction: $15,750 for single filers or $31,500 for joint filers in 2025, indexed for inflation.
• 60% AGI limit on cash donations: Permanently allows you to deduct up to 60% of your AGI for cash contributions to qualified charities (up from 50%). For example, if you AGI is $100,000 and you donate $60,000 in cash, you can deduct the full amount from your taxes. This applies to all taxpayers -- but those in the highest tax bracket will be subject to the new 35% deduction cap starting in 2026, slightly reducing the benefit.
• Extended the estate and gift tax exemption: The federal estate tax exemption, which was set to expire at the end of 2025, was increased to $15 million for single filers or $30 million for joint filers in 2026, with adjustments for inflation going forward.

Most estates will no longer be subject to federal estate taxes.

Have questions about the best way to plan your contributions for the year? Work with your tax advisor to help you determine which method of giving is right for you.