A Season of Giving: 2025 Charitable Planning Updates
Andrea McClelland, CFP®
For many, the Thanksgiving season brings renewed focus on gratitude and the desire to support organizations doing meaningful work. This year, charitable planning also sits against the backdrop of significant tax changes from the One Big Beautiful Bill Act (OBBBA). These updates create new opportunities for some taxpayers and introduce new considerations for others as we approach year-end 2025 and look toward 2026 and beyond.
Below are several key provisions and charitable strategies worth keeping in mind - some perennial, some newly influenced by OBBBA - along with a reminder that the right approach will depend on each taxpayer’s individual situation.
More Taxpayers May Itemize: The Raised SALT Cap
Beginning in 2025, OBBBA raises the State and Local Tax (SALT) deduction cap to $40,000 ($20,000 for married filing separately), with modest annual adjustments through 2029, scheduled to revert to $10,000 in 2030. This expansion will allow more households - particularly in higher-tax states - to itemize again after several years of taking the standard deduction.
For those who expect to itemize, resuming the practice of tracking charitable receipts and considering year-end giving may be helpful. It's important to note that the allowable SALT cap phases out between $500,000 and $600,000 of modified AGI ($250,000-$300,000 for MFS), landing back at the $10,000 cap at $600,000 MAGI.
Itemizers in 2026: New Charitable Deduction Limitations
Beginning in 2026, OBBBA introduces two changes that affect how itemized charitable deductions work. First, a 0.5% AGI floor will apply, meaning only charitable gifts above that amount will be deductible. Second, for taxpayers in the 37% marginal bracket, the value of itemized deductions will be limited to 35%.
These rules do not apply in 2025. Their effect on a donor’s planning will depend on expected income levels, filing status, and other personal factors. Because tax situations vary widely, the best timing and approach for charitable giving should be evaluated on an individual basis.
A New Charitable Deduction for Standard-Deduction Filers (Beginning 2026)
Starting in 2026, taxpayers who use the standard deduction will be able to claim an above-the-line charitable deduction of up to $1,000 for single filers and $2,000 for married couples filing jointly for cash contributions to public charities (excludes DAFs and private non-operating foundations).
This creates a modest but meaningful opportunity for standard-deduction filers to receive a tax benefit for charitable giving.
Evergreen Charitable Strategies in a Changing Landscape
Donating Appreciated Securities
Donating long-term appreciated positions directly to qualified charities remains one of the most tax-efficient giving strategies. Donors can deduct the full market value1, avoid capital gains taxes on the appreciation, and the charity receives the full value of the gift. This approach can be particularly relevant in times when markets have experienced sustained growth.
Qualified Charitable Distributions (QCDs)
For those over age 70½, a Qualified Charitable Distribution (QCD) can be a meaningful way to give back. A QCD allows you to donate up to $108,000 (indexed annually for inflation) directly from your IRA to a qualified charity, which can count toward your RMD and help reduce your adjusted gross income (AGI). Because both the new Enhanced Senior Deduction2 and the expanded SALT deduction (above) interact with AGI, QCDs may play a helpful role for seniors who wish to make donations and are monitoring AGI-sensitive thresholds.
Donor-Advised Funds (DAFs)
DAFs remain a flexible way to structure charitable giving over time. They allow donors to make a contribution in one year and recommend grants to charities in later years. For some households, consolidating giving into 2025 through a DAF may help avoid the upcoming 0.5% AGI floor and deduction-value limits; for others, a different timing may be more appropriate. As always, the most effective approach to giving is personal - what works best depends on your own tax situation.
Bringing It Together
The Thanksgiving season is a natural moment to reflect on the causes and communities that matter most to you. It’s also a good time to revisit how charitable giving fits into your financial plan in light of the significant tax law changes taking effect in 2025 and 2026.
If you would like help reviewing how these updates may apply to your situation - or how best to incorporate charitable giving into your year-end planning - we’re here to help you navigate your options.
- Charitable deductions are subject to IRS AGI limitations based on the type of property donated and the type of charity. Gifts of long-term appreciated assets to public charities are generally deductible up to 30% of AGI, with any excess amount typically carried forward for up to five years.
- OBBBA introduced an additional deduction for taxpayers age 65 and older, available from 2025 through 2028. The Enhanced Senior Deduction is up to $6,000 per taxpayer and is claimed in addition to the age-based increase to the standard deduction. It phases out at 6% of modified AGI above $75,000 (Single) / $150,000 (MFJ) and is fully phased out at $175,000 (Single) / $250,000 (MFJ).
This article is intended for educational and informational purposes only and does not constitute specific tax, legal, investment, or financial advice. The information provided is derived from sources believed to be reliable and is based on current tax laws and regulations as of the date of publication, which are subject to change. Aegis Wealth Management, LLC is not a law firm or accounting firm and does not give legal, accounting, or tax advice. Readers should consult with a qualified legal and/or tax professional to understand how these laws and regulations may apply to their unique circumstances. This material is not intended to be relied upon to avoid tax penalties under U.S. federal tax law. Past performance does not guarantee future results. All investing involves risk, including risk of loss.