How the One Big Beautiful Bill Act Could Impact Your Year-End Charitable Giving

With the One Big Beautiful Bill Act (OBBB) set to change charitable deduction rules starting in 2026, both individuals and corporations may want to adjust their giving strategy before year-end. The updated law introduces new limitations for high-income taxpayers while creating new opportunities for non-itemizers.

As the end of 2025 approaches, now is the time to understand what’s changing — and how to plan ahead.

What’s Changing for Corporations & High-Income Donors

Beginning in 2026, the OBBB will:

Introduce a 1% floor on corporate charitable deductions
Add a 0.5% floor on deductions against AGI for individual itemizers
Slightly reduce the deduction value for individuals in the highest tax bracket (from 37 cents to 35 cents per dollar contributed)

These floors mean deductions will only apply to contributions above those limits, reducing the tax benefit of charitable gifts for many high-income donors.

Looking ahead to 2026, many experts are recommending that corporations and high-income donors consider accelerating charitable giving for 2025 while the existing rules remain more favorable. 2025 planning opportunities may include:

Bunching contributions from future years into 2025
Pre-funding future commitments by contributing to donor-advised funds with appreciated investments
Leveraging charitable carry-forwards in 2025

To preserve tax efficiency, individuals who regularly support charitable causes may want to consider making a Qualified Charitable Distribution, QCD, for donations directly from an IRA Required Minimum Distribution. Up to $108,00 in 2025 and $111,000 in 2026 per taxpayer can be donated directly through a QCD. Those contributions count towards the required minimum distribution for the year while being excluded from gross income. This approach can help maintain both giving levels and tax advantages as the new rules take effect.

Proactive timing can help maximize both philanthropic impact and tax savings.

Good News for Non-Itemizers

Beginning in 2026, individuals who take the standard deduction will be able to claim a charitable deduction of up to:

$1,000 for individuals
$2,000 for married couples filing jointly

This provision expands access to charitable deductions for millions of taxpayers.

However, one restriction remains important to note: this deduction cannot be used for contributions to donor-advised funds.

How to Prepare Before the Changes Arrive

To ensure you are maximizing tax-efficient generosity, consider:

Reviewing charitable giving plans for the next several years
Exploring whether shifting contributions into 2025 makes sense
Evaluating donor-advised fund timing if you itemize
For businesses, coordinating charitable strategy with tax and finance teams

Stay Prepared and Plan Confidently

Thoughtful charitable planning can make a meaningful difference — both for the causes you support and your long-term tax strategy. As the OBBB changes take effect, Lanigan Ryan is here to help you navigate the transition smoothly.

Feel free to send us a message to discuss your year-end giving strategy and stay ahead of the upcoming rule changes.