Charitable Giving and Itemized Deduction Changes for 2026
Beginning in 2026, several important changes affect the tax benefits available for charitable contributions.
Taxpayers who do not itemize deductions may now deduct certain cash charitable contributions in addition to claiming the standard deduction. The deduction is limited to $1,000 for single filers and $2,000 for married couples filing jointly. This provides a new tax benefit for charitable giving to many taxpayers who previously received no federal deduction because they claimed the standard deduction.
For taxpayers who do itemize, a new limitation applies. Beginning in 2026, charitable contributions are deductible only to the extent that total contributions exceed 0.5% of adjusted gross income (AGI). For example, a taxpayer with $500,000 of AGI would effectively lose a deduction for the first $2,500 of charitable contributions.
High-income taxpayers may also be subject to a new overall limitation on itemized deductions. For 2026, the limitation applies when taxable income exceeds $768,700 for married couples filing jointly and qualifying surviving spouses, $640,600 for single and head-of-household filers, and $384,350 for married taxpayers filing separately.
For taxpayers above these thresholds, total itemized deductions are reduced by 5.4% of the lesser of (1) total itemized deductions or (2) the amount by which taxable income exceeds the applicable threshold. In practical terms, this generally limits the federal tax benefit of itemized deductions attributable to income in the 37% tax bracket to approximately 35 cents on the dollar rather than 37 cents on the dollar.
This overall limitation is applied after any other limitations that apply to individual itemized deductions. It also does not apply in determining the qualified business income deduction.
These changes make the timing and structure of charitable gifts increasingly important, particularly for taxpayers who make significant annual contributions. Strategies such as bunching several years of charitable gifts into one year or using a donor-advised fund may be worth considering.
If you are planning significant charitable contributions during 2026, please contact us so we can evaluate how the new rules may affect your deduction and overall tax planning.
Sincerely,
Epperson CPA, PLLC