Charitable Giving in 2026: What the New Tax Rules Mean and How to Plan Around Them
Charitable giving changed in 2026. The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, rewrote several rules that decide how much tax benefit you receive when you give.
Those changes create new opportunities and a few traps worth avoiding. Here is what changed, who it affects, and the moves that still work best this year. Read the rules (lengthy, I know) now, and give yourself time to plan instead of scrambling in December.
On this page
- What did the OBBBA change for charitable giving in 2026?
- Can you deduct charitable gifts without itemizing?
- What is a donor-advised fund (DAF) and how does it work?
- What is a qualified charitable distribution (QCD)?
- Should you donate appreciated stock instead of cash?
- Why start charitable planning in June instead of December?
- Working with a Chartered Advisor in Philanthropy (CAP)
- Other frequently asked questions
What did the OBBBA change for charitable giving in 2026?
The OBBBA made three changes that matter most to many givers:
- A new above-the-line deduction for non-itemizers. Taxpayers who take the standard deduction can now claim a charitable deduction of up to $1,000 (single filers) or $2,000 (married filing jointly).
- A new AGI floor for itemizers. Only contributions that exceed 0.5% of adjusted gross income (AGI) now qualify for a deduction.
- A new cap on itemized deductions. High earners in the top marginal bracket face a cap that can reduce the effective tax benefit of large gifts.
If you have not reviewed your giving plan since these rules took effect, the assumptions you planned around may no longer apply.
Can you deduct charitable gifts without itemizing?
Yes. Starting in 2026, you can take the standard deduction and still deduct your charitable gifts.
Before 2026, only itemizers could generally receive a federal income tax deduction for charitable contributions. Because the standard deduction beats itemizing for most middle-income households, tens of millions of donors gave with no tax benefit at all. The new deduction for non-itemizers changes that:
- Single filers can deduct up to $1,000 in charitable contributions.
- Married couples filing jointly can deduct up to $2,000.
- You claim it on top of the standard deduction, so you do not have to itemize to benefit.
One limit to note: contributions to a donor-advised fund do not qualify for this above-the-line deduction, because they are not direct gifts to operating charities.
What is a donor-advised fund (DAF) and how does it work?
A donor-advised fund is a giving account that lets you contribute now, deduct now, and recommend grants to charities later on your own schedule.
Here is how a DAF works in four steps:
- You contribute assets to the fund. Cash, appreciated stock, or mutual fund shares from non-retirement accounts all qualify.
- You claim a tax deduction in the year you contribute.
- The assets grow tax-free inside the fund, invested according to your preferences.
- You recommend grants to qualified charities whenever you choose: this year, next year, or years from now.
DAFs work especially well when you want to:
- Accelerate a deduction in a high-income year before you decide which charities to support.
- Simplify recordkeeping. One contribution to the DAF generates a single tax document, rather than receipts from a dozen organizations.
- Give appreciated assets and avoid capital gains (more on that below).
For itemizers, DAFs remain one of the most flexible and tax-efficient giving tools available.
What is a qualified charitable distribution (QCD)?
A qualified charitable distribution lets IRA owners age 70.5 or older give directly from a traditional IRA to charity, with the gift excluded from taxable income.
If you own a traditional IRA and you are 70.5 or older, a QCD may be the most tax-efficient way to give available to you right now. Here is why:
- In 2026, you can transfer up to $111,000 per year, per person (indexed for inflation), directly from your IRA to a qualified charity.
- The transfer never counts as taxable income, even though it reduces your IRA balance.
- A QCD counts toward your required minimum distribution (RMD), so you satisfy the RMD and make the contribution in one transaction.
- Lower reported income can ease the thresholds that drive Medicare premiums (IRMAA), Social Security benefit taxation, and net investment income tax.
Consider the math. If you sit in the 22% federal bracket and you give $20,000 through a QCD rather than taking a taxable distribution first, you avoid roughly $4,400 in federal taxes on that amount. The charity receives the same gift either way, and you keep the difference.
Should you donate appreciated stock instead of cash?
In most cases, yes. Giving appreciated assets directly to charity or a DAF beats selling them and donating the cash.
When you give appreciated assets you have held for more than one year directly to a qualified charity or DAF, you generally:
- Claim a deduction for the full fair market value of the asset.
- Avoid capital gains tax on the appreciation entirely.
- Hand the charity the full value, which it can sell with no tax impact of its own.
Here is a clear example. You hold 100 shares worth $10,000 that you bought for $3,000:
- If you sell the shares, you owe capital gains tax on $7,000 of appreciation, and then donate the remainder.
- If you donate the shares directly to a DAF, you claim a $10,000 deduction, owe no capital gains tax, and the charity receives the full $10,000.
This approach works especially well in years when your portfolio has grown and you are considering rebalancing. Donating appreciated positions is one of the most tax-efficient ways to rebalance.
Why should you start charitable planning in June instead of December?
Starting in June gives you options that disappear in a year-end rush.
Most people make their giving decisions in November and December, often driven by tax deadlines and year-end appeals. That approach works, but it limits your choices. Plan in mid-year and you can:
- Evaluate whether a donor-advised fund is a good fit for your situation.
- Identify appreciated positions that make strong donation candidates before the market shifts.
- Coordinate your giving with your full-year tax plan.
- Make meaningful gifts on your own schedule instead of rushing in December.
For business owners, pre-retirees with large IRA balances, and families holding concentrated stock positions, mid-year is when the most valuable charitable-planning conversations happen.
Working with a Chartered Advisor in Philanthropy (CAP®)
Charitable giving at a meaningful level sits at the intersection of financial planning, tax strategy, estate planning, and personal values. Getting it right calls for someone who understands all those dimensions and how they fit together.
I (Chris Hilyer) hold the Chartered Advisor in Philanthropy (CAP®) designation, earned through the American College of Financial Services. The CAP® curriculum centers on the intersection of wealth management and philanthropy, including charitable vehicles, estate and legacy planning, and values-based giving conversations with families.
At Heritage Wealth Solutions, charitable giving planning is part of how we help clients build plans that reflect what matters most to them. Whether you give $5,000 a year or much more, a clear strategy helps your giving go further, and your tax situation work better.
Review your 2026 giving plan
Want to review your charitable giving plan for 2026? We are glad to help.
or call us at 602-833-4300
Frequently asked questions
Can I take the standard deduction and still deduct charitable gifts in 2026?
Yes. The OBBBA created a new above-the-line deduction of up to $1,000 for single filers and $2,000 for joint filers, even if you do not itemize.
How much can I give through a QCD in 2026?
Up to $111,000 per year, indexed for inflation, directly from a traditional IRA if you are 70.5 or older.
Do donor-advised fund contributions qualify for the new non-itemizer deduction?
No. DAF contributions are not direct gifts to operating charities, so they do not qualify for the above-the-line deduction. They still work well for itemizers.
Is it better to donate stock or cash?
For appreciated assets held more than a year, donating the shares directly usually beats donating cash, because you claim the full fair market value and avoid capital gains tax.
The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Chris Hilyer and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Material in part created with Claude.
