While the attention of much of the public was fixed on other provisions in the sweeping new reconciliation bill signed into law on July 4, a number of changes in the law affecting charitable giving—some anticipated and some not—made their way to the finish line. Even though most of those provisions will take effect beyond 2025, it is a good idea to familiarize yourself with them to give yourself an opportunity to structure your own giving plans to reap optimal benefits from your own charitable strategy.

In some cases, simply keeping the current rules in place was major news. Topping this list were provisions that kept expanded gift- and estate-tax exemptions from retreating to their levels prior to 2017—changes that would have greatly reduced those exemptions. However, several new twists were introduced that produce opportunities for the vigilant to benefit. Here are some of the most intriguing:

Starting in 2026, those who do not itemize deductions on their federal income-tax returns will be able to deduct up to $1,000 ($2,000 for married couples filing jointly) for cash gifts to public charities. Gifts to donor-advised funds or certain other types of tax-exempt organizations would not qualify for this new tax break. This will give the almost 90% of taxpayers estimated to be non-itemizers the chance to realize some tax savings from their charitable giving by expanding or reinstating annual contributions of cash.

Another provision of the bill can actually result in a slight decrease in tax savings for those with the highest incomes starting next year. Even though the current tax brackets that go up to 37% remain in place, charitable deductions will be able to reduce taxable income by a maximum of only 35%. For instance, a $100,000 deductible gift by a taxpayer in the 37% tax bracket would produce tax savings of $35,000 next year, instead of the $37,000 savings it would generate this year. Donors in the 37% bracket may want to consider accelerating gifts into the 2025 tax year to maximize savings.

Similarly, charitable gifts will be deductible to the extent they exceed 0.5% of a taxpayer’s adjusted gross income (AGI) starting in 2026. A taxpayer with an AGI of $200,000, for example, would be able to deduct only charitable contributions in excess of $1,000 (0.5% of $200,000). Corporations will be subject to a 1% floor before deducting charitable contributions. Here again, some may find it advantageous to make gifts originally intended for 2026 this year.

We encourage you to check with your personal tax advisor to see how the new law will affect you. Please feel free to call on us as well if we can help with your charitable planning in any way.