New 2026 Tax Laws Support Non-Profit Giving Opportunities
Using Charitable Donations Can Reduce Your Taxes and Support Your Community!
Kiplinger recently shared an article focused on how a charitable donation tax deduction can help you lower your tax bill in 2026 while also supporting a worthwhile cause. Tax-deductible charitable contributions include goods, cash, and property donated to a qualified 501(c)(3) organization. To claim a tax write-off on your tax return, there are several rules you must follow. Only contributions to certain charitable organizations are deductible.
Only contributions to qualified non-profit organizations are eligible. An IRS-approved tax-exempt organization can be a charity or a non-profit 501(c)(3) organization.
To take the charitable donations deduction in 2025 you will need to itemize your tax return to claim the contribution. You cannot claim the standard deduction and charitable deductions in the same tax year. That means you’ll need to itemize deductions to deduct your charitable donations.
However, if your standard deduction is a bit higher than your itemized deductions, you may want to consider combining two years’ worth of charitable contributions into the current tax year. This strategy, known as “bunching,” will help yoo boost your itemized deductions for the current year so they exceed your standard deduction amount.
Also, you may want to use a donor-advised fund if you’re bunching donations. With a donor-advised fund, you make one large contribution to the fund (cash or assets) and deduct the entire amount as an itemized deduction in the year you make it. Money from the fund is then sent to the charities of your choice over the next few years when you’re claiming the standard deduction.
Itemizing charitable contributions
If you do itemize, you can generally deduct contributions of cash or property to charitable organizations.
- If property is donated, your deduction is generally equal to the property’s fair market value.
- If you give property that has increased in value, you may have to reduce the fair market value by the amount of appreciation when calculating the deduction.
- If the property has decreased in value, your deduction is limited to the current fair market value.
- For tips on determining the fair market value of donated property, see IRS Publication 561.
Rules and limitations for charitable tax deductions
For gifts of $250 or more, you must get a written acknowledgment from the charity stating the following:
- The amount of any cash donation and a description (but not value) of any donated property
- Whether the charity gave you any goods or services in return for your contribution.
(Note: Additional requirements for written records and acknowledgments may apply. See IRS Publication 1771 for detailed information.)
If you donate property worth $500 or more, you have to submit Form 8283 with your return. If you donate a motor vehicle, boat, or airplane worth over $5,000, you might have to get the property appraised, too. Other requirements must be satisfied, so read the Schedule A instructions carefully before claiming a charitable deduction.
The amount you can deduct can be limited or reduced, too. For example, if you make a gift and receive a benefit in return – such as food, entertainment, or merchandise – you generally have to subtract the value of the benefit from your deduction. The deduction for cash donations is generally limited to 60% of your federal adjusted gross income (AGI). However, that percentage drops for certain types of contributions.
- If you donate property to certain charitable organizations, your deduction might be limited to 50% of your AGI.
- There’s a 30%-of-AGI limit for capital gain property contributed to certain organizations.
If you’re denied part of a deduction because of the above limits, you may be able to carry the excess amount over and deduct it on a future tax return (carryovers are generally limited to five years).
Check the Schedule A instructions and IRS Publication 526 for details and additional limits.
Is a QCD better than a charitable deduction?
If you’re at least 70½ years old, you can transfer up to $108,000 directly from a traditional IRA to charity through a qualified charitable distribution (QCD).
Charitable donations made by qualified older adults via a QCD aren’t deductible, but you can still save on taxes since QCDs aren’t included in taxable income. So, you get a tax break whether or not you itemize.
There’s an additional perk for taxpayers who use QCDs to donate to charity – QCD donations also count toward your required minimum distribution (RMD). And, again, they count as an RMD without adding to your adjusted gross income.
Major changes to charitable deductions in 2026 include several changes that impact taxpayers who may opt to donate, beginning in 2026. That means the following new rules for charitable donations will impact tax returns you generally file in early 2027. Keeping track of these key changes may help you maximize your savings.
- New standard deduction for non-itemizers: Starting in 2026, you will be allowed to deduct up to $1,000 in cash donations ($2,000 for joint filers) without itemizing. The rule applies only to direct cash gifts given to qualifying 501(c)(3) charities or non-profit organizations.
- Charitable deduction floor: Charitable donations that are itemized (generally non-cash gifts) must exceed 0.5% of your adjusted gross income before qualifying for a tax deduction.
- Cash gifts to public charities: Taxpayers can deduct cash contributions up to 60% of their adjusted gross income. The provision is now permanent.
- New cap on itemized deductions: Starting in 2026, the new legislation implements a 35% cap for all itemized deductions. From 2018 through 2025, there is no cap on itemized deductions.
All of the changes mentioned above will likely impact how you handle charitable donations in 2026, and whether you opt for a standard deduction or to itemize deductions.
If you plan to donate, keep track of your contributions through receipts, as you may be able to write off certain items during the next tax filing season. If you’re unsure of how to manage your donations, speak with a trusted and certified tax professional or advisor.
