Upcoming Tax Law Changes: What Donors Need to Know for 2026
H.R.1 – “One Big Beautiful Bill Act” Impacts for donors taking effect in 2026
As you plan for the future, we want to share some important information regarding upcoming changes to U.S. tax laws that may affect your financial planning and charitable giving.
Several new provisions are scheduled to take effect in 2026. We have summarized the key points that may be relevant for your conversations with your financial or tax advisor.
Summary of Key Tax Provisions for Donors
Here are some of the significant changes that may impact your giving strategies:
- New Universal Charitable Deduction: A new, permanent universal charitable deduction will be available starting in 2026. This allows taxpayers who take the standard deduction to deduct their charitable gifts as well, up to $1,000 for single filers or $2,000 for married couples filing jointly.
- AGI Floor for Itemizers: For taxpayers who itemize their deductions, please be aware that starting in 2026, charitable contributions are deductible only to the extent total qualified gifts exceed 0.5% of that taxpayer’s adjusted gross income, or AGI. To illustrate, a taxpayer with an AGI of $200,000 would only be able to deduct qualified gifts that exceed $1,000.
- Income Floor for Businesses To be able to claim a deduction for their charitable contributions, corporations must donate a minimum of 1% of their taxable business income to eligible nonprofit organizations. For example, a company with $1,000,000 in taxable income will only be able to deduct gifts over $10,000.
Key Giving Strategies to Discuss with Your Advisor
Given these changes, this is an excellent time to plan your philanthropy to ensure your generosity has the greatest possible impact. We recommend discussing the following strategies with your advisor:
- Qualified Charitable Distributions (QCDs): For donors aged 70½ or older, a QCD remains one of the most tax-efficient ways to give. It allows you to donate directly from your IRA (up to $108,000 per person in 2025) to a qualified charity. These distributions are not counted as taxable income and may fully or partially satisfy your Required Minimum Distribution (RMD).
- Gifts of stocks, bonds, and other securities: Benefits of giving from your taxable investment portfolio include bypassing capital gains taxes, claiming the full value of the gift as a charitable deduction, and making a larger gift than if you first sold the securities and then donated the proceeds. Assets must have been held for at least one year. Simply ask your broker to transfer the assets to Theodore Payne Foundation for Wild Flowers & Native Plants, Inc., DTC: 0062 (Vanguard) Account Number: 69243825
- “Bunching” Gifts with a Donor-Advised Fund (DAF): To maximize your deduction before the new AGI floor takes effect, you might consider “bunching” several years’ worth of charitable giving into 2025. By making a larger contribution to a Donor-Advised Fund this year, you can take the full tax deduction under the current rules. You can then recommend grants from your DAF to TPF and other charities you support over the next several years.
Your partnership is vital to our mission, and we are deeply grateful for your support.
While Theodore Payne Foundation does not provide tax or legal advice, we are always happy to work with you and your advisors to help you achieve your philanthropic goals.
For questions, contact Katie Tilford, Director of Development and Communications
818-768-1802 x22