The recently passed One Big Beautiful Bill is a sweeping tax and economic reform package that touches many aspects of household finance, but for charitably inclined individuals and families, it brings some major changes to how charitable donations are treated under the tax code. Below is a breakdown of some important charitable giving updates, when they take effect, and how they may influence your planning. 1. Permanent Universal Charitable Deduction Effective: Tax years beginning after December 31, 2025 Non-itemizers can now claim a charitable deduction of $1,000 per individual or $2,000 per couple filing jointly. The deduction applies to cash donations to public 501(c)(3) charities. Previously, only those who itemized their deductions could take advantage of charitable contribution deductions. Now, if you typically don’t itemize, this expanded deduction gives you an extra incentive to give annually. Make sure to keep receipts for all qualified donations. 2. Cash Contribution Limit Set to 60% of AGI for Itemizers Effective: Permanently, beginning in 2026 The bill codifies the higher limit of 60% of AGI for cash contributions to qualified charities. This was originally raised from 50% under the Tax Cuts and Jobs Act. Donors considering large gifts during high income years (e.g. after business sale or vesting event) can plan to use this higher deduction limit now pass 2025. 3. $1,700 Federal Tax Credit for Scholarship-Granting Organizations (SGOs) Effective: Tax years beginning after December 31, 2026 Taxpayers can claim up to a $1,700 non-refundable federal tax credit for cash donations to approved SGOs. This tax credit is available to all taxpayers, including non-itemizers, and can be carried forward for up to five years if unused; however, it is reduced by any state tax credit received for the same donation, and donations claimed for this credit cannot also be deducted as charitable contributions. 4. 0.5% AGI Floor for Deductibility Effective: Tax years beginning after December 31, 2025 Itemizers can only deduct charitable contributions that exceed 0.5% of AGI. This floor applies before the deduction is calculated. For example, a taxpayer with $200,000 AGI must contribute more than $1,000 before receiving any tax benefit for charitable gifts. Beginning in 2026, donors may want to consider bunching small donations into fewer years to cross the threshold and optimize deductibility. 5. Itemized Deduction Cap Effective: For tax years beginning after December 31, 2025 High earners in the 37% tax bracket will experience a limitation on their itemized deductions. For these taxpayers, itemized deductions will be reduced by 2/37ths of the lesser of: The total itemized deductions, or The amount of taxable income that surpasses where the 37% marginal bracket on ordinary income begins For example, a $10,000 donation may only reduce taxes by $3,500 rather than $3,700. Donors in higher tax brackets who are considering a large charitable contribution may want to consider making the gift in 2025 to maximize their deduction under the current marginal rate before the new cap goes into effect. The One Big Beautiful Bill gives donors more opportunities to save on taxes but also introduces new complexities. Whether you take the standard deduction or itemize, your approach to charitable giving should evolve with the tax code. Consider reviewing your current 2025 giving plan and adjust strategies for 2026. Our team at Aviance Capital Partners can work with you to take advantage of Donor Advised Funds, Qualified Charitable Distributions, and scholarship gifts. Need a guide for strategic gifting before the new laws go into effect? Included is a recent article Senior Wealth Advisor, Frank Aguilera, collaborated on regarding charitable giving strategies: Tax Savvy Year End Giving Strategies | 
