By Cheryl Winokur Munk
Dec. 2, 2025
In addition to the holiday season, it’s giving season, heralded each year with Giving Tuesday, which in 2025 falls on Dec. 2. This year, more taxpayers have reason to be strategic in their charitable giving efforts. That’s because President Donald Trump’s One Big Beautiful Bill Act gives some taxpayers an added incentive to increase their charitable efforts in 2025, while for others, gifting next year could give them more bang for their buck.
People who take the standard deduction won’t receive any tax benefit from their 2025 contributions, but they could in 2026.
“You want to be thoughtful because it could result in more savings, this year or next year, depending on your circumstances,” says Sara Montgomery, partner in the family legacy practice at Southfield, Mich.-based Plante Moran Wealth Management. Here’s what advisors and clients need to know as they contemplate year-end charitable giving.
Non-itemizing taxpayers. People who take the standard deduction won’t receive any tax benefit from their 2025 contributions. If possible, they should wait to make charitable gifts until tax year 2026, when, thanks to the new law, taxpayers who don’t itemize can also deduct up to $1,000 ($2,000 for joint returns) annually in cash contributions to public charities, says Andy Whitehair, a director with Baker Tilly’s National Tax practice. For tax year 2025, the OBBBA raised the standard deduction to $31,500 for married couples filing jointly and to $15,750 for single taxpayers.
Because the standard deduction is more generous than it used to be, the new rules could benefit more taxpayers. The Tax Foundation, a nonpartisan tax policy nonprofit, estimates that about 14.2% of taxpayers will itemize in 2026 under the OBBBA, compared with about 32% who would have itemized had certain provisions of The Tax Cuts and Jobs Act expired.
Non-itemizing taxpayers might consider delaying year-end charitable gifts until after Jan. 1, says Jonathan Jack, a senior tax advisor at Minneapolis-based Wealth Enhancement. He advised a married couple who planned to donate between $5,000 and $6,000 in 2025 to hold off until next year so they could get the $2,000 deduction. One caveat is that the deduction doesn’t apply to noncash donations or donations made to donor-advised funds.
Affluent itemizers. Some taxpayers will get more bang for their buck by increasing their charitable giving in 2025. This applies to people who itemize and have adjusted gross incomes ranging from $100,000 to roughly $625,000 for single filers, or $750,000 for married couples filing jointly, with a net worth of less than a few million dollars, Whitehair says.
Here’s why. The OBBBA created a charitable floor in 2026 for taxpayers who itemize. The formula multiples adjusted gross income by 0.5% to limit deductions. So, for example, the first $2,000 in charitable donations aren’t deductible for a taxpayer with an AGI of $400,000; the floor is $2,500 for a taxpayer with an AGI of $500,000.
“You have to hurdle that, and anything above that you can deduct,” says Robert Conzo, chief executive of The Wealth Alliance in Melville, N.Y. Taxpayers should keep in mind that the amount of charitable cash contributions they can deduct is generally limited to 60% of their AGI.
Special considerations for high-net-worth individuals. Taxpayers in the highest tax bracket of 37% have even more reason to consider boosting their charitable giving in 2025. Not only do they have to contend with the floor like other itemizers, but their taxable deductions are also limited in another way.
The new legislation caps the tax benefits of itemized charitable deductions at 35%, even for those in the 37% marginal tax bracket. So, for example, a high-income taxpayer who donates $1,000 would receive a $350 deduction instead of the $370 they would receive in 2025.
High-net-worth givers might consider putting more than a year’s worth of donations into a donor-advised fund and taking the standard deduction in subsequent years. “These people are going to want to front-load and get as many deductions this year as they can,” Conzo says.
Other considerations. You don’t have to be super wealthy to bunch donations in a donor-advised fund and reap the benefits. Some taxpayers who weren’t planning to itemize in 2025 and have ample cash flow might consider shifting gears, Baker Tilly’s Whitehair says. They could give a larger amount to one or more charities or bunch donations in a donor-advised fund in 2025, itemize, and take the standard deduction the next few years.
For some taxpayers, itemizing could be more advantageous than in the past several years because of the new state and local tax deduction rules, known as SALT. The OBBBA increases the maximum SALT deduction to $40,000 from $10,000 for taxpayers making under $500,000, subject to an income-based phaseout. “Speak to a tax advisor,” Whitehair says. “Especially if you’ve been strategizing charitable giving and tax planning in the past.”
This Barron's article was legally licensed by AdvisorStream.
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