A critical window for charitable giving is closing. New tax rules will soon reduce the tax benefits for generous high-net-worth families, making 2025 the optimal year to maximize your charitable impact and savings.
What’s Happening in 2026?
- Reduced Benefits: For high earners, the value of itemized deductions (including charitable) is capped at 35%, effectively dropping the “per-dollar” benefit from 37¢ to 35¢.
- New Floors: Charitable gifts (for itemizers) are deductible only to the extent they exceed 0.5% of AGI (e.g., first $2,500 isn’t deductible on $500k AGI).
- Permanent 60% AGI Limit: 60% AGI limit for cash gifts to public charities.
- New Universal Deduction: Non-itemizers get a new $1,000 deduction ($2,000 MFJ) for cash donations to public charities.
Why Act Now in 2025?
- Greater Value: Accelerating large gifts in 2025 avoids the 0.5% AGI floor and reduced deduction caps, resulting in greater tax benefits for the same donation.
- DAFs: Fund a Donor-Advised Fund to capture today’s higher deduction value and retain flexibility to give over time.
- SALT Deduction: The temporary increase in the SALT deduction cap makes itemizing more valuable and results in greater benefit by “bunching” charitable deductions.
- IRA Qualified Charitable Distributions (QCDs): Donors over 70½ can direct up to $108,000 in 2025 from IRAs to charities, bypassing AGI floors and deduction limits entirely
Charitable Giving in 2025 vs. 2026: Timing Matters
With significant changes on the horizon, a strategic approach to your charitable giving has never been more critical. Our advisors at Burling Wealth Partners are equipped with the expertise to help you understand these new regulations and develop a plan that works for you. Reach out to us today to explore your options.
