The Big News: Return of the Universal Charitable Deduction (UCD)
This provision is important for philosophical and practical reasons. The UCD democratizes the tax code’s treatment of philanthropic giving, allowing all taxpayers to receive a charitable tax deduction.
- Starting in 2026, non-itemizers can deduct cash gifts.
- Deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash gifts to public charities even if you take the standard deduction.
○ Not eligible: gifts to donor-advised funds (DAFs), informal campaigns like GoFundMe, supporting organizations, and some private foundations.
Itemizers: Timing Matters
Legislation introduces new complexities and considerations for itemizers.
What You Can Do in 2025
- Accelerate your giving right now: If you plan to itemize, 2025 is an ideal year to maximize your charitable giving allowing you to benefit from today’s more generous deduction rules before changes arrive in 2026.
- Consider starting a Donor Advised Fund.
○ Contribute Cash or Appreciated Assets: Secure a deduction in 2025 while avoiding capital gains on appreciated assets.
○ Engage Family and Build a Legacy: Name joint, secondary, or successor advisors to involve loved ones and carry your vision forward.
○ Consolidate Giving: Manage all contributions and grantmaking from one account with streamlined reporting.
Learn more: Donor Deadlines for 2025
Looking Ahead to 2026
- A 0.5% AGI floor: You can only claim a charitable deduction if your total annual giving exceeds 0.5% of your Adjusted Gross Income (AGI).
o TIP: Bunch contributions to clear the 0.5% AGI floor by consolidating multiple years’ worth of planned donations into a single tax year. - A 35% cap on itemized deductions: This means that high earners in the 37% tax bracket will not get dollar-for-dollar value from the deduction for their charitable gifts.
- Thinking beyond cash: Consider noncash and illiquid assets. Avoid capital gains tax by giving long-term appreciated assets.
- If you are 70½ or older you can make a gift directly from your IRA without having to pay income taxes on the distribution. Your gift may go towards all or part of your required minimum distribution.
Learn more: Does the One Big Beautiful Bill Act Change Your Charitable Giving Plan?
How We Can Help
- Provide gift acknowledgment letters for tax purposes.
- Discuss multi-year pledge arrangements.
- Share estate planning resources.
Additional Resources
What to Know About the New Tax Deduction for Older Adults
- Adults 65 and older may qualify for a new $6,000 deduction, in addition to existing standard deductions.
Should New Tax Rules Change How—and When—You Donate?
- Taxpayers should carefully evaluate the timing and amount of any significant donations.
Charitable Giving Tax Savings Calculator
- Try Fidelity Charitable’s interactive tool to see how charitable giving can help you save on taxes this year or over several years.
Strathmore Hall Foundation is a charitable organization under section 501(c)(3) of the IRS code, Tax ID 52-1233092. This page is intended to provide general gift planning information. Consult your financial or tax advisors to align your giving with your goals and the evolving landscape.