2017’s Tax Cuts and Jobs Act (TCJA) substantially increased the standard deduction amounts, capped the state and local tax deduction, changed the mortgage interest deduction and eliminated miscellaneous itemized deductions that are subject to the 2% of AGI floor. Many of the deductions enacted by the TCJA were extended by 2025’s One Big Beautiful Bill Act (OBBBA).

For those who will continue to itemize, charitable contributions will be deductible only to the extent they exceed 0.5% of AGI. For example, a donor with an AGI of $100,000 can only deduct their contributions to the extent they exceed $500 (0.5% of $100,000). So, a donor who only gives $500 has nothing to deduct. By contrast, a donor who gives $2,000 has $1,500 to deduct. The more a donor gives in a year the less the impact of the 0.5% floor.

For contributions to exceed the standard deduction, taxpayers may want to bunch or increase contributions in certain years. Combining multiple years of annual contributions in the bunch years and adding other itemized deductions will increase the likelihood of exceeding the standard deduction. The impact of the 0.5% floor can be mitigated with careful bunching of contributions as well.

For tax years beginning after Dec. 31, 2025, individuals who do not elect to itemize (i.e., they use the standard deduction) can deduct up to $1,000 ($2,000 if MFJ) of charitable contributions of cash to a qualified charitable organization. (Donations to a private foundation or a donor advised fund do not qualify).

A magna cum laude graduate of Cornell University, Christopher P. Woehrle earned his JD and LLM (Taxation) from the Widger School of Law at Villanova University, where he is also a member of the Graduate Tax Program Advisory Board. Chris is a member of the Pennsylvania Bar and teaches charitable gift planning and principles of wealth management in the LLM taxation program at the Widger School of Law. You can connect with Chris by email.