Trump’s legislation creates a limited option for those non-itemizers starting with 2026 returns: up to $1,000 of above-the-line charitable deductions for single filers and $2,000 for joint filers. Tax professionals say that provision effectively rewards smaller cash gifts beginning next year.
Why Modest Donors May Benefit by Waiting
Tax practitioner Thomas Gorczynski, an enrolled agent based in Tempe, Arizona, notes that anyone who does not plan to itemize in 2025 can generally secure a better result by postponing cash donations until 2026, when the new above-the-line allowance becomes available. Otherwise, the same contribution in 2025 would deliver no federal tax benefit.
Implications for Higher-Income Filers
The 2026 rules are less favorable for taxpayers in the top bracket or those making sizable contributions. From that year forward, the law introduces a so-called charitable deduction “floor,” permitting itemizers to deduct only the portion of gifts that exceeds 0.5 percent of adjusted gross income. In addition, the maximum benefit is capped for filers in the 37 percent bracket.
Bob Petix, senior wealth strategist at Wells Fargo Wealth and Investment Management, advises high-income donors to consider accelerating large gifts into 2025. “If you expect the new floor and cap to limit your deduction, front-loading contributions now can lock in today’s unrestricted treatment,” he said.
Bunching Through Donor-Advised Funds
One practical technique for affluent taxpayers is “bunching” multiple years of planned donations into 2025 via a donor-advised fund. The donor receives a full deduction in 2025, then distributes grants to chosen charities over several years. Because donor-advised funds are recognized public charities, contributions qualify for the same itemized deduction percentage limits that apply to direct gifts.
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The popularity of these accounts has grown steadily; total assets surpassed $230 billion in 2023, according to the National Philanthropic Trust. More detail on donor-advised fund operations is available from the Internal Revenue Service.
Action Items Before December 31, 2025
Financial planners outline several steps donors can take to maximize deductions under the current rules:
- Review 2025 income projections. A higher adjusted gross income raises the dollar value of deductions and may justify front-loading gifts before the 0.5 percent floor applies.
- Assess itemization status. Taxpayers close to the standard-deduction threshold might combine charitable giving with other deductible expenses, such as prepaid state taxes or mortgage interest, to surpass the standard deduction for 2025.
- Evaluate appreciated assets. Donating long-term appreciated securities to a donor-advised fund can eliminate capital-gains tax while capturing a fair-market-value deduction.
- Keep documentation. To substantiate any deduction, taxpayers must obtain contemporaneous written acknowledgments from recipient organizations and maintain receipts for cash transfers under $250.
Looking Ahead
The phased-in nature of Trump’s tax changes means charitable strategies will differ sharply between the 2025 and 2026 tax years. Modest donors who rely on the standard deduction stand to gain by delaying cash contributions until the non-itemizer credit becomes effective. In contrast, high-income households may realize greater savings by completing large gifts – or funding a donor-advised account – before the new floor and cap reduce the value of itemized deductions.
As Giving Tuesday 2025 approaches, advisers recommend that donors coordinate with tax professionals to align philanthropic goals with evolving federal rules and personal income forecasts.
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