February 10, 2026
Charitable Giving After the “Big, Beautiful” Tax Bill: What High Earners Need to Know
Charitable giving remains one of the most powerful planning tools available to high-income taxpayers, but the rules around how and when those gifts deliver tax benefits shifted meaningfully under the recent tax law changes. If you’re a high earner who regularly supports charitable causes, understanding these changes is critical to making sure your generosity is working as efficiently as possible.
Below is a plain-English breakdown of what changed, and how it may affect you.
1. New hurdle to jump before you can take a donation deduction
For 2026 and onward, anyone who itemizes and wants to take a deduction for charitable donations will need to exceed a 0.5% floor before they can claim the donations as an itemized deduction. The 0.5% floor is multiplied by your adjusted gross income (AGI) to determine the portion of your donation that is disallowed.
What this means for you: Smaller donations may no longer reduce your tax bill unless they clear this new threshold. For example, if your AGI is $400,000, only gifts above $2,000 will be deductible.
Moves to consider:
- Bunch gifts: Combine several years’ worth of donations into one tax year to clear the deduction floor.
- Look at all of your assets: Donating appreciated stock, real estate, and other non-cash assets may help you exceed the floor while unlocking additional tax advantages.
2. New limit on all itemized deductions
If you’re in the 37% federal income tax bracket, the value of your charitable deduction benefits is now capped at 35%. Another way to think of it is that your tax benefits are capped at 35 cents for every dollar you donate.
What this means for you: If you itemize deductions, your donations will still count in full, but your tax break will be a bit smaller. For example, if you’re in the 37% tax bracket, a $10,000 donation that once generated $3,700 in tax savings is limited to $3,500 under the new cap.
Moves to consider:
- Planning will be key: Work with a financial advisor and tax advisor to find ways to potentially reduce your taxable income and reduce the amount of money taxed at the highest rate. This could include maximizing contributions to tax-advantaged accounts or looking for ways to defer income, along with charitable donations.
3. Permanent 60% AGI limit
The ability to deduct cash gifts to public charities up to 60% of your AGI is here to stay.
What this means for you: This higher limit (up from the historical 50% cap) gives you more flexibility to make and fully deduct large cash gifts in a single year. Keep in mind, the 60% limit applies to public charities, including DAFs; cash donations to private foundations remain capped at 30%.
Moves to consider:
- Carry it forward: If your gifts exceed the annual cap, you can carry forward the unused deduction for up to five tax years.
4. Universal deduction for non-itemizers
If you take the standard deduction, you can now also deduct up to $1,000 (single filers) or $2,000 (married couples filing jointly) for cash gifts to qualified operating charities, with inflation adjustments over time. Note: The deduction excludes donor-advised fund (DAF) contributions.
What this means for you: Even without itemizing, you can still lower your tax bill while supporting causes and charities you care about.
Moves to consider:
- Max it out: If you’re charitably inclined, consider contributing the full allowable amount each year to claim the deduction. Also, many employers will match charitable donations up to certain limits, so check with your employer to see if they can add to your gift.
