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President Donald Trump‘s “huge lovely invoice” added trillions of dollars of tax breaks, a few of which may impression your deduction for charitable giving.
U.S. particular person giving grew to $392.45 billion in 2024, up by about 5%, together with inflation, from the earlier 12 months, in response to Giving USA’s annual report launched in June.
However because the calendar winds down, your 2025 year-end giving technique may look totally different than that of earlier years, monetary consultants say.
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When planning for charitable giving, buyers ought to think about a “multi-year method,” particularly after the most recent tax legislation adjustments, in response to Dianne Mehany, who leads the non-public tax group of EY’s nationwide tax division in Washington, D.C.
Here’s a breakdown of a few of the key adjustments — and the way they might impression your year-end donations.
It is a ‘no-brainer’ for smaller items
When submitting taxes, you declare the higher of your itemized tax breaks or the usual deduction. For 2025, the usual deduction is now $15,750 for single filers and $31,500 for married {couples} submitting collectively.
However 90% of filers do not itemize, in response to the most recent IRS information, which prevents most filers from claiming the charitable deduction.
This may quickly change due to Trump’s laws. Beginning in 2026, there is a new charitable tax break for non-itemizers, value as much as $1,000 for single filers and $2,000 for married {couples} submitting collectively.
With the change taking place in 2026, it may make sense to delay smaller, year-end items in case you usually do not itemize deductions, consultants say.
“It looks like a no brainer to only do it in January and seize a bit profit that you simply would not in any other case obtain,” licensed monetary planner Edward Jastrem, chief planning officer at Heritage Monetary Providers in Westwood, Massachusetts, previously told CNBC.
There is a ‘double hit’ for high earners
Trump’s laws may additionally shrink the charitable deduction for some greater earners in 2026, consultants say.
Beginning in 2026, there’s an itemized charitable deduction “ground,” which solely permits the tax break as soon as it exceeds 0.5% of your adjusted gross earnings. Plus, the brand new legislation caps the profit for filers within the high 37% income tax bracket, additionally starting in 2026.
“You are primarily lowering your profit to 35% as a substitute of 37%,” which “seems like a double hit,” when mixed with the 0.5% deduction ground, stated Mehany from EY.
With the charitable deduction reductions for 2026, “there’s some profit to accelerating [donations] this 12 months,” stated licensed public accountant Sheneya Wilson, founder and CEO of Fola Monetary in New York.
One choice to frontload items in 2025 could possibly be utilizing a so-called donor-advised fund, which works like a charitable checkbook.
You obtain an upfront charitable deduction on transferred belongings by “bunching” a number of years of items right into a single 12 months. Then, you’ll be able to make investments and doubtlessly develop the steadiness whereas selecting grants for public charities later.
Sharon Epperson contributed to reporting for this story.
