For married non-itemizers, the standard deduction can now be combined with an enhanced $2,000 deduction for charitable contributions.

2. A modest sweetener for non-itemizers: For married non-itemizers, the standard deduction can now be combined with an enhanced $2,000 deduction for cash contributions to 501(c)(3) charitable organizations. The standard deduction for married joint filers increases from $29,200 to $31,500 for the 2025 tax year (FIGURE 2). This benefit enables married joint filers to enlarge their pre-tax deduction from $31,500 to $33,500 for the 2025 tax year.

Caveat: Property or other non-cash donations such as stocks are ineligible for this deduction. In addition, donor-advised funds (DAFs) can’t be used. Experts suggest that taxpayers may want to consider delaying charitable contributions to 2026 if they’re unable to contribute the maximum deduction.²

3. Using your IRA to donate—and save on taxes: For tax filers 70½ and older, you can use a qualified charitable distribution (QCD) to donate pretax funds directly from traditional IRAs to qualified charities, thereby reducing your adjusted gross income (AGI). For those who are taking required minimum distributions (RMDs), you can use a QCD to count toward your RMD without adding to taxable income. This is a tax-efficient deduction you can use whether you itemize or take the standard deduction. The QCD limit is $108,000 for 2025 (increases to $111,000 for 2026) for each IRA owner, and the total can include many separate donations.³  Itemizers can still claim additional charitable deductions (within allowable limits) over and above the current QCD limits.⁴ Unlike some of the new restrictions on charitable contributions (see below), QCDs are above-the-line deductions that directly reduce a taxpayer’s AGI, potentially reducing the amount owed for the 3.8% surtax on net investment income or income-driven Medicare IRMAA surcharges.

Caveat: QCD distributions must be processed before year-end, and donors need to remember to subtract the amount of the QCD from their taxable IRA withdrawals on their tax return, since IRA sponsors aren’t required to itemize QCDs on the 1099-R form. And, as noted, QCDs are only available to seniors of a certain age.

The OBBBA limits the benefit of itemized deductions to the 35% bracket.

Charitable Giving: Limitations

4. Charitable giving floor for high-net-worth (HNW) donors – For itemizers, the new law puts a floor on charitable donations tied to 0.5% of adjusted gross income (AGI).

Example: If your AGI is $500,000 and you want to donate $6,000 to a charity, your charitable deduction will be reduced by 0.5%, resulting in a $2,500 decrease (i.e., $500,000 X 0.5%). You can still donate the entire $6,000, but you can only deduct $3,500 (i.e., $6,000 - $2,500).

5. Charitable giving ceiling for HNW donors – The OBBBA limits the benefit of itemized deductions to the 35% bracket. High-income filers who would otherwise fit into the 37% bracket will be limited to itemized deductions at the 35% bracket, and many will no longer qualify for the additional $40,000 SALT deduction.

Example: For a tax filer in the 37% tax bracket with an AGI of $1 million, a pre-OBBBA charitable donation of $100,000 would ordinarily confer tax savings of $37,000. But with a deduction ceiling now set at the 35% tax-bracket level (combined with the 0.5% AGI limit—see item #4 above), the tax filer’s benefit is reduced to $33,250:

• Floor of 0.5% of AGI: $5,000 ($1 million X 0.5%)
• Charitable deduction: $95,000 (gift amount minus floor amount)
• Tax benefit: $33,250 ($95,000 X 35% limit)⁵

Other Considerations

The potential loss of deductions from those new OBBBA limitations could prompt some tax filers to front-load their charitable declarations in the 2025 tax year. One way to do this would be to contribute to a donor-advised fund (DAF) by December 31, 2025.

By bunching several donations earmarked for a broad mix of charities into a single DAF donation, the donor can receive a full deduction for 2025 (avoiding the limitations) and instruct the DAF sponsor to distribute the proceeds in later years, on a schedule that makes sense for the donor. Some tax filers may opt to take an itemized DAF deduction now and take the standard deduction in future tax years. Combining a DAF with a QCD (for taxpayers who qualify) could potentially enhance the tax efficiency of a giving strategy even more.

Lastly, high-net-worth tax filers concerned about the potential phase-out of the historically high gift and estate-tax exemptions included in the 2017 TCJA should know that the exemptions were extended by OBBBA—rising from $13.99 million per individual in 2025 to $15 million ($30 million for married couples) for 2026 and beyond. Those exemptions are not just permanent; they’ll also be adjusted annually for inflation starting in 2027. The top federal estate and gift-tax rate stays at 40% for amounts exceeding the exemption.⁶

Talk to your financial or tax professional to help you develop a charitable giving strategy that works for you.

¹ Wall Street Journal, “Get Ready for New Rules on Tax Breaks for Charitable Giving,” 7/25/25.

² Edward Jones, “Charitable Deduction Changes Coming in 2026: Strategies to Consider Before Year-End,” 11/12/25.

³ Wall Street Journal, “How Seniors Can Donate More to Charity and Pay Less in Taxes,” 12/13/24.

⁴ Fidelity Charitable, “What Is a Qualfied Charitable Distribution?”, 2025.

⁵ Capital Group, “How the One Big Beautiful Bill Act (OBBBA) Impacts Year-End Tax planning,” 2025.

⁶ Citizens Private Bank, “Why You Should Plan for the Estate Tax Exemption Now—The Rules Have Changed, and the Window Is Open,” 2025.

Important Risks: Investing involves risk, including the possible loss of principal.

This information should not be considered investment advice or a recommendation to buy/sell any security or tax advice. In addition, it does not take into account the specific investment objectives, tax, and financial condition of any specific person. Investors should consult with their own financial professional for additional information. This information also cannot be used to avoid IRS tax penalties. As with all matters of a tax or legal nature, please consult with your tax or legal counsel for advice.

This information has been prepared from sources believed reliable but the accuracy and completeness of the information cannot be guaranteed. This material and/or its contents are current at the time of writing and are subject to change without notice.