For many taxpayers, charitable giving has long been motivated by personal values, community needs, or a desire to support meaningful causes — not necessarily by a tax benefit.
That is especially true for people who take the standard deduction. In recent years, many taxpayers who donated to charity did not receive a federal income tax deduction for those gifts because they did not itemize deductions.
Beginning with the 2026 tax year, that changes for some taxpayers. Under the One, Big, Beautiful Bill Act, signed into law on July 4, 2025, taxpayers who do not itemize may be able to deduct up to $1,000 in qualifying cash charitable contributions, or up to $2,000 for married couples filing jointly.
That does not mean every donation automatically qualifies, and it does not replace the need for good recordkeeping. But it does make one habit especially important this year: save your donation receipts.
Why This Matters
For most taxpayers, the standard deduction is simpler and more valuable than itemizing. In the past, that often meant charitable donations did not reduce taxable income unless the taxpayer had enough itemized deductions — such as mortgage interest, state and local taxes, and charitable gifts — to exceed the standard deduction.
Starting in 2026, taxpayers who take the standard deduction may still be able to deduct a limited amount of qualifying cash donations to certain qualified organizations. The IRS currently describes the limit as up to $1,000 for individual filers and $2,000 for joint filers.
For example, a taxpayer who takes the standard deduction and makes $800 in qualifying cash donations during 2026 may be able to reduce taxable income by that amount, assuming the donation meets IRS requirements and the taxpayer has proper documentation.
What Changed for Standard Deduction Takers
The new rule is designed to give non-itemizers a limited charitable deduction. For many households, this may be the first time in several years that smaller cash donations can provide a federal tax benefit.
A few important details:
The deduction applies to cash contributions to certain qualified charitable organizations. It does not apply to every type of giving. Contributions to donor-advised funds, supporting organizations, and private foundations are generally excluded from this non-itemizer deduction.
Cash contributions can include donations made by check, credit card, debit card, electronic payment, or similar methods, but taxpayers should keep records showing the date, amount, and recipient of the gift. IRS guidance emphasizes that taxpayers should maintain documentation for deductions claimed on their returns.
What Changed for Taxpayers Who Itemize
The new law also affects taxpayers who itemize deductions.
Beginning in 2026, itemized charitable deductions generally must exceed a new 0.5% adjusted gross income floor before they are deductible. In plain English, that means the first portion of charitable giving — equal to 0.5% of income — may not count toward the itemized charitable deduction. IRS materials summarize this as a requirement that charitable contributions exceed 0.5% of the contribution base before a deduction is allowed.
For example, if a taxpayer has $100,000 of income, the first $500 of charitable contributions may not be deductible for itemizing purposes. Contributions above that threshold may still be deductible, subject to the usual rules and limits.
This does not mean charitable giving is less meaningful. It simply means taxpayers who itemize may want to be more intentional about timing, documentation, and coordination with their broader tax plan.
A Note for Business Owners
Business charitable giving may also require additional planning in 2026.
For corporations, the law introduced a new 1% floor on corporate charitable contribution deductions for tax years beginning after 2025. In general, only contributions above 1% of taxable income may be deductible, while the existing overall corporate deduction limits still apply.
Because the details can vary based on entity type, income, and how the contribution is structured, business owners should review charitable giving plans with a qualified tax professional before assuming how a deduction may apply.
What to Do Now
The most practical step is simple: keep organized records of your charitable gifts throughout the year.
That may include receipts from charities, email confirmations, credit card statements, canceled checks, or written acknowledgments when required. A folder in your email, a shared file with your tax preparer, or a simple spreadsheet can make tax-time review much easier.
It may also be worth confirming that the organization you support is a qualified charitable organization. The IRS provides tools and publications to help taxpayers understand which organizations and contributions may qualify.
Giving Can Be More Than a Tax Decision
Tax rules can influence how you give, but they do not have to define why you give. For many families, charitable giving is part of a broader conversation about values, community, and the legacy they want to help shape over time.
At Wilcox Financial Group, our Legacy & Impact planning helps individuals and families think through how charitable giving may fit within their broader financial, estate, income, and tax planning goals. That may include conversations around strategic giving structures, values-aligned planning, and ways to involve the next generation in meaningful discussions about wealth and purpose.
Ready to think more intentionally about your giving?
Explore our Legacy & Impact planning approach and start a conversation about what meaningful impact could look like for you, your family, and the causes you care about.
If you are in the highest marginal tax bracket, the value of all your itemized deductions (including charitable contributions) is capped at a maximum tax benefit of 35% per dollar donated. If any charitable contributions are disallowed by this new deduction floor, they can be carried over for up to five years
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Neither MML Investors Services, LLC nor any of its subsidiaries, employees or representatives are authorized to give legal or tax advice. This is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax, or accounting advice. Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters.CRN202906-11338343