Upticks: Charitable Giving Tax Changes in 2026 (And Things To Do Before Year-End)
By Luke Sullivan on November 7, 2025
Explore the 2026 charitable giving changes with Jake and Cory: the new 0.5% AGI floor, the 35% deduction cap, the universal deduction for non‑itemizers, and when to use donor‑advised funds or QCDs. Learn smart 2025 moves—accelerate gifts, bunch with appreciated stock, and avoid common ROI mistakes—so your generosity can go further in retirement.
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Read an overview of the conversation below
The New 0.5% AGI Floor and Deduction Cap
Starting January 1, 2026, charitable giving for those who itemize deductions will look very different. The new rules introduce a 0.5% adjusted gross income (AGI) floor, meaning only donations above that threshold will be deductible. For example, if your AGI is $200,000, the first $1,000 of charitable gifts won’t count toward your deduction. This change could impact many donors who make regular annual contributions.
In addition to the AGI floor, there’s a new cap on the deduction rate. Even if you’re in the highest tax bracket, your charitable deduction will be limited to 35%. Jake explained, “If you’re in the 37% bracket, you don’t get to deduct the full 37%—it’s capped at 35.” This means high earners who give intentionally may see a reduced tax benefit from their generosity.
These changes are designed to shift the landscape of charitable giving, especially for those who have historically maximized their deductions. It’s important to review your giving strategy now and consider how these new rules may affect your future tax planning.
Universal Deduction for Standard Filers
There’s good news for taxpayers who take the standard deduction. Beginning in 2026, non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash gifts to qualified charities. This universal deduction opens the door for millions of Americans to benefit from charitable giving, even if they don’t itemize.
Cory highlighted, “A huge majority of people take the standard deduction. If you do, you can claim $1,000 if single or $2,000 if married for cash gifts to qualified charities.” This change is especially helpful for retirees and others who typically don’t have enough deductions to itemize.
To take advantage of this new benefit, start tracking your cash donations now. Save receipts and keep a running total so you’re prepared to claim the deduction when you file your taxes in 2026. Being organized will ensure you don’t miss out on this valuable opportunity.
Donor-Advised Funds and Appreciated Stock
With the new rules approaching, donor-advised funds (DAFs) are becoming an even more attractive strategy for charitable giving. A DAF allows you to contribute multiple years’ worth of donations in a single year, locking in a larger deduction while you’re in a higher income bracket. You can then grant funds to charities over time, giving you more flexibility and control.
Jake explained, “A DAF lets you put in multiple years’ worth of gifts now, lock in the deduction while you’re in a higher income bracket and then grant to charities over time.” Funding a DAF with appreciated stock is especially powerful, as it allows you to avoid capital gains taxes and deduct the fair market value of your contribution. Cory added, “If you have highly appreciated stock, you can gift shares to the donor-advised fund, avoid capital gains, and deduct the full value.”
It’s important to remember that contributions to a DAF are irrevocable. Work with your financial planner to model the impact on your overall plan and ensure you’re not sacrificing your own financial security. Don’t wait until the last minute—DAFs take time to open and fund, so start the process early.
Retiree Strategies: QCDs and RMDs
For retirees, qualified charitable distributions (QCDs) from IRAs remain a powerful strategy, and the rules aren’t changing in 2026. If you’re age 70½ or older, you can use QCDs to satisfy required minimum distributions (RMDs) and give directly to charity without increasing your taxable income. This approach is especially useful for those who take the standard deduction.
Cory said, “QCDs are a great vehicle for people 70½ or older. You can give directly to a charity and not worry about paying income tax on that amount.” Jake emphasized that QCDs don’t require itemizing, making them a flexible option for retirees who want to increase their charitable impact.
To use QCDs effectively, coordinate with your financial planner and tax advisor early in the year. It’s important that the distribution goes directly from your IRA custodian to the charity, and keep records for your tax return. This strategy can help you meet your RMD requirements while supporting the causes you care about.
Action Steps and Jake’s Soapbox
With significant changes coming in 2026, now is the time to review your charitable goals and talk with your CPA and financial planner. If you regularly give to charity and itemize your deductions, consider accelerating your gifts this year or bunching multiple years of donations together. Donor-advised funds take time to open and fund, so don’t wait until the last minute.
Jake says, “Give yourself some time. Don’t wait till December 31 and call our office to open a donor-advised fund—it’s not going to work.” Start the conversation early to help ensure you can take advantage of current rules and take full advantages of your deductions. Being proactive will help you make the most of your generosity.
As for Jake’s passionate discussion, it’s important to understand true return on investment (ROI) and liquidity in your financial life. Many people overlook expenses like property taxes, insurance, maintenance, and broker fees when calculating profits from investments like real estate. Jake cautioned, “You have all these people on the internet touting how to get rich in real estate. You’ve just got to be careful—it’s not as simple as it sounds.” His key takeaway is to run the math and consider the time, effort, and risk involved before making major financial decisions.
Thank you for tuning in, we hope you have a great week!
