How OBBBA Changes Charitable Giving — What Tax Pros Should Be Advising Clients

The One Big Beautiful Bill Act (OBBBA) introduces several changes to how charitable deductions work starting in tax year 2026. As a tax professional, your guidance will be critical in helping clients adapt smartly. Below is what has changed, what clients need to watch for, and what strategies you should be discussing now.

Key Changes Under OBBBA

1. New Deduction Floor for Itemizers: Starting in 2026, individuals who itemize will only be able to deduct the portion of their charitable contributions that exceeds 0.5% of their adjusted gross income (AGI). Contributions up to that “floor” won’t be deductible.

2. Permanent 60% AGI Limit for Cash Gifts to Public Charities: OBBBA makes permanent the higher AGI percentage limit (60%) for cash donations to public charities that was temporarily in place under the Tax Cuts and Jobs Act (TCJA).

3. New Above-the-Line Deduction for Non-Itemizers: Non-itemizers (those who take the standard deduction) will again be able to deduct charitable contributions—up to $1,000 for single filers or $2,000 for married filing jointly—for cash gifts to qualified public charities.

4. Reduced Benefit for Top-Bracket Taxpayers: Individuals in the top tax bracket (37%) will see a reduced deduction benefit. Under OBBBA, deductions for those in that bracket will be limited to 35%.

5. Carryforward Provisions & Other Rules Remain: The carryforward rules for donations exceeding limits are still in place. Also, existing rules for non-cash contributions (such as appraisal requirements for property over certain values) remain relevant.

   
   

What This Means for Your Clients

With these changes, the timing and structure of charitable giving matter more than ever. Some clients will benefit from front-loading or bunching deductions in 2025, while others may need to plan for 2026 depending on their projected income, itemization status, and giving patterns.

Clients in the 37% bracket may want to especially review whether accelerated giving now will produce more benefit versus spreading out gifts. Also, clients who have stopped tracking smaller charitable donations because they weren’t itemizing may need to resume that practice to take full advantage of new non-itemizer deduction options.

Practical Strategies to Discuss Now

Here are action items you might suggest as part of your counseling:

• Bunching Contributions: Encourage clients who typically itemize to consider bunching charitable gifts in years when itemization is likely to be more beneficial (e.g. years with higher income or when SALT caps are less constraining).

• Track Donations for Non-Itemizers: For those who will likely stay with the standard deduction, advise them to track cash gifts carefully—even small ones—because of the new non-itemizer deduction up to the limits.

• Evaluate “When” vs “What” to Give: For those considering large gifts or gifts of property, property donations should be appraised properly. Consider timing of gifts vs income fluctuations.

• Communicate the Value vs Tax Benefits: Some clients give for philanthropic reasons more than tax savings. With reduced marginal benefits in some cases, helping clients frame donations in terms of personal value and social impact can also be part of the conversation.

  
  

How to Position Your Practice

• Be proactive: Reach out to clients, especially those who donate regularly, high-income filers, or those in the 37% bracket. Let them know these changes are coming.

• Provide client-friendly materials: Prepare handouts or email summaries explaining the changes in simple terms, perhaps with “if-then” scenario examples (e.g. “If you donate $10,000 and itemize under X vs waiting until 2026 …”).

• Use these changes in client acquisition: Many individuals and nonprofits will have concerns or questions. Demonstrating expertise in how OBBBA affects charitable giving can differentiate you.

• Stay updated: Some rules (such as exact thresholds, inflation adjustments, or IRS guidance) may not be fully fleshed out yet. Make sure to track IRS or Treasury clarifications.

  
  

Conclusion

OBBBA changes many assumptions around charitable deductions. For many clients, charitable giving will become slightly more complicated—but with thoughtful planning, they can still maximize the tax‐benefits. As their trusted adviser, your role will be guiding them through timing, record-keeping, and strategy so that they make the most of what’s available.

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.