How the One Big Beautiful Bill Act May Affect Charitable Giving in Our Community

H.R. 1— the One Big Beautiful Bill Act—approved by Congress earlier this year and signed into law by President Trump on July 4, includes hundreds of provisions affecting everything from immigration enforcement to Medicaid coverage. Perhaps overlooked in the debate over the act’s many provisions is the fact that the law also makes significant changes to the rules around charitable giving and income tax deductions—changes that are important for those making charitable contributions and the organizations they support to understand.

Here are some of the key charitable giving provisions contained in the new law, and how the changes may affect you and your philanthropy. Many of the tax law changes take effect this tax year, 2025, while others noted below will not take effect until 2026. As always, consulting a qualified financial advisor is recommended when considering your individual financial position.

1. Permanent 60 Percent Deduction for Cash Gifts Donors may continue to deduct up to 60 percent of their adjusted gross income (AGI) when making cash gifts to public charities, including donor advised funds. This 60 percent ceiling for cash gifts may be layered (or stacked) on top of non-cash gifts if the combined deduction amount does not exceed 60 percent of one’s AGI.

2. Increase in Standard Deductions In 2025, the bill provides new standard deductions: A single tax filer may take a standard deduction of $15,750 (up from $15,000) and joint filers may take a standard deduction of $31,500 (up from $30,000). Donors age 65 or older may take an additional bonus deduction of up to $6,000 per filer (or $12,000 for married couples), depending on one’s income level. This additional deduction is set to expire in 2028.

3. New Above-the-Line Charitable Deductions Donors who take the standard deduction may also deduct above-the-line charitable contributions of up to $1,000 for single filers and $2,000 for joint filers in 2026. The charitable gifts must be made to public charities and exclude donor advised funds, private non-operating foundations and supporting organizations.

4. Donors Who Itemize Subject to 0.5 Percent of AGI In 2026, if donors itemize their deductions, there will be an imposed floor equal to 0.5 percent of one’s AGI. This means that individual taxpayers who itemize their deductions may claim a charitable contribution only if the aggregate amount of their contributions exceeds 0.5 percent of their AGI, regardless of the type of recipient or the form of property contributed. For example, if a donor earns $500,000 of AGI in 2026, the donor must contribute more than $2,500 (0.5 percent of $500,000) to itemize their deduction. If that donor contributes $10,000 to charitable organizations, then only $7,500 is deductible in that particular year.

5. Tax Benefits Capped for High Earners Beginning in 2026, the tax benefit for itemized deductions will be capped at $0.35 for each dollar donated for those in the highest income bracket. The tax benefit was previously capped at $0.37, which remains in effect through 2025.

6. Federal Estate Tax Exemptions Will Not Sunset The federal estate, gift and generation-skipping transfer tax exemptions that were set to sunset at the end of 2025 will continue. In 2025, the exemption is $13.99 million for single filers and $27.98 million for married couples. In 2026, the exemptions will increase to $15 million and $30 million, respectively. Each year thereafter, the exemptions will be adjusted for inflation.

Since the act contains so many interlocking measures, these are but a handful that may affect your overall financial planning and your charitable giving. As you navigate this shifting landscape, the Community Foundation of Sarasota County can be a trusted partner to put your philanthropic intentions into action. Every day, we work directly with donors, as well as their professional advisors, to help them make strategic decisions that benefit both them and the causes they care about.

Betsy Pennewill is General Counsel at the Community Foundation of Sarasota County.

This article is made available for educational purposes only to provide the reader with a general understanding of the law. It is not intended to provide, nor does it constitute legal or tax advice.