New tax rules are changing charitable deductions — here’s how to make the most of them

Recent revisions to the U.S. tax code are poised to significantly alter how Americans plan for and claim charitable contributions in the coming years, tax professionals said.

As part of the provisions in President Donald Trump’s tax and spending package — known as the One Big Beautiful Bill Act — everyday donors may see tax gains, while those who itemize, especially high earners, face stricter rules.

These changes, effective for donations made during 2026, are already impacting financial planning strategies, experts said.

“There’s no one-size-fits-all for every individual, but I think no matter who you are, at what level of income, I think there's opportunity in this tax bill for just about everybody to potentially lower their taxes,” Mark Gallegos, certified public accountant and partner at accounting firm Porte Brown’s Elgin office, said.

By being aware of the new rules and strategizing early, taxpayers can get the most out of charitable deductions.

Standard deduction filers

Historically, only those who itemized could deduct charitable gifts.

Starting with the 2026 tax year, single filers using the standard deduction can now claim up to $1,000, or $2,000 if married filing jointly, as an above-the-line deduction for cash donations to qualified public charities. Above-the-line deductions reduce a filer’s adjusted gross income.

This change follows a temporary pandemic benefit that allowed a $300 deduction for charitable giving. For the 2021 tax year, about 47 million households claimed the temporary deduction for donations totaling around $18 billion, according to the Nonprofit Alliance.

Trump's new legislation now opens the door for more people to claim the tax break.

“That's a real incentive for people to donate to these charitable organizations,” Rob Pasquesi, certified public accountant and founder of Pasquesi Partners, said.

Tighter limits for high-earners, large donors

Only charitable giving above 0.5% of adjusted gross income is deductible for those who itemize, effective in the 2026 tax year, or returns due April 2027. For example, a couple with an AGI of $300,000 could only deduct donations in excess of $1,500.

High-income taxpayers in the 37% tax bracket will also see their federal tax benefit from deductions capped at roughly 35%, meaning they will not receive dollar-for-dollar value from their charitable gifts. So a high-income filer’s $1,000 donation would receive a $350 deduction for the 2026 tax year, instead of the current $370.

The new tax bill also cemented a 2017 rule that allowed itemizers to claim cash donations up to 60% of their AGI.

Under the rules, small or distributed donations may lose value, while large lump-sum gifts may need more strategic timing.

“These are some small changes with real impacts for those that contribute a lot every year,” Pasquesi said. “I always advise my clients to get in the mindset of thinking about taxes at least once a quarter during the year versus once a year when they’re due. There are a lot of strategies to minimize what they pay in taxes later on, and it relieves the stress of starting the new year.”

Scholarship donation credit

Beginning in the 2027 tax year, taxpayers may claim a nonrefundable credit of up to $1,700, or 100% of the gift, whichever is less, for donations to qualified K–12 scholarship-granting organizations.

With the scholarship donation credit available next year, supporting private school scholarships may now yield a federal tax credit under the new tax package, according to regulations.

Maximizing giving in 2026

With the new tax provisions in effect, donors have an opportunity to make their generosity work harder — both for the causes they care about and for their own financial planning. Experts said the key is timing and strategy.

To ensure taxpayers get the most out of their giving, donors can utilize a strategy called bunching, Gallegos said.

“You can take what you would give over the next two to three years to your organization and give it now. Instead of $1,000 each year for three years, give $3,000,” Gallegos said. “And you avoid that half-percent haircut.”

For those who want flexibility, donor-advised funds offer a way to make a lump-sum contribution now while distributing grants to charities over time. However, contributions to donor-advised funds don’t qualify for an above-the-line deduction.

“Donors should start planning early,” James Provenza, an attorney who counsels clients on planned giving, said. “You can’t wait until the very last minute because there’s always processing time for these donations.”

High earners may also want to look beyond charitable gifts and consider ways to lower their adjusted gross income. Maximizing retirement contributions or increasing pretax payments to health savings accounts and student loans can soften the impact of the new 0.5% floor on deductions.

When it comes to qualifying for the new above-the-line deduction, simplicity matters: Only direct cash donations to public charities count.

For donors passionate about education, planning ahead could pay off. Eligible donations made in 2026 may position donors to claim the 2027 scholarship credit, adding another layer of tax benefit.

Thoughtful timing, strategic giving and awareness of new credits can help donors make the most of their philanthropy, Gallegos said.

“Anytime we have new tax legislation ... there’s an unknown out there, and I think it makes people nervous,” Gallegos said. “At the end of the day, you’re going to find that a lot of these tax provisions can have some great benefits for people.”