Charitable Giving in 2026
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By Ben Dolan, CFP®
The impact of the One Big Beautiful Bill Act (OBBBA), passed on July 4th of last year, is still being felt. Of all the changes in the bill, perhaps none are as far-reaching as those regarding charitable giving.
Therefore, I think it’s time for a refresher on the new rules, with help from Laura Saunders, tax reporter for the Wall Street Journal. Below is from her piece this past weekend, which outlines changes all of us should keep in mind as we consider charitable gifts going forward:
“Get your CWA (Contemporaneous Written Acknowledgment) or risk your deduction
As noted above, donors who want to deduct a gift of cash or property of $250 or more need a written statement from the charity. It should give the value of cash or a description of property donated, and it should say whether the donor received goods or services in return. This should be in hand before filing the tax return.
What if someone donates $1,000 and is a guest at the charity’s gala, and the dinner costs the group $200 per head? Then the charity’s statement should specify that and the donor should subtract it from the total donation. In this case, the deduction would be $800.
However, token gifts of small value—like a mug—need not be subtracted. For 2026, such gifts can be up to $13.90.
The CWA requirement also applies to donors of Qualified Charitable Distributions from traditional IRAs.
Be aware of new rules for 2026
This year non-itemizers—filers who don’t list deductions on Schedule A—can deduct cash charitable donations up to $1,000 (singles) and $2,000 (joint filers). Those making a gift of $250 or more to one group will need CWAs, which may be a confusing surprise to many filers next year.
In addition, last year’s tax changes tightened the rules for donors who itemize for 2026. Namely, they can’t deduct an amount equal to 0.5% of their adjusted gross income.
So if a couple has $200,000 of AGI, they can deduct only the amount above $1,000, whether their total donations are $1,200 or $12,000. This will likely spur donors to forgo annual gifts and bunch them into larger, less frequent amounts.
For the highest-income filers who itemize, the tax benefit of charitable deductions is now capped at 35% rather than the top rate of 37%. That reduces their value by 5.4%, according to San Francisco CPA Richard Pon.
Get an appraisal, if necessary
Donations of noncash items worth more than $5,000 often require a qualified written appraisal in addition to a CWA, and the appraiser must sign the donor’s IRS Form 8283. For some items, the appraisal must be attached to the tax return.
Note: The rules detailing both appraisals and the qualifications of appraisers are stringent. For more details, see IRS Publication 526.
Remember the deduction limits
Deductions for charitable contributions are capped at 20%, 30%, 50% or 60% of the donor’s adjusted gross income (AGI) for most filers, depending on whether the gift is cash or property and what type of organization the recipient is.
In general, donors can deduct an amount up to 60% of their AGI if the contribution is cash and the recipient is an eligible charity. That drops to 30% of AGI if the donation is appreciated securities to a public charity. For donors giving appreciated property such as securities to certain private foundations, the limit drops to 20% of AGI. For more details, see IRS Publication 526.
Unused deductions can carry over and be used for up to five years, including the year of death, and then expire. They can’t be used to reduce federal estate tax.”
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