Americans are remarkably generous. Every year, individuals across the country give to their churches and synagogues, support disaster relief halfway around the world, fund local food banks, and back causes close to their heart — often without giving much thought to the tax mechanics behind it. Most people simply assume that if they write a check to charity, they get a deduction for it. Starting in 2026, that’s no longer quite true — for anyone, whether you itemize or take the standard deduction. A provision from the One Big Beautiful Bill Act quietly rewrites the rules on charitable giving, and if you give regularly, it’s worth a few minutes to understand how it affects you.
What’s Changing
If you take the standard deduction, you’ll now be able to deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions — a new benefit that didn’t exist before. This is a real tax break: that amount comes directly off your taxable income, on top of your standard deduction, which means you genuinely pay less tax because of it. For someone in the 22% bracket, a $2,000 gift translates to roughly $440 in tax savings that simply wasn’t available in prior years. The only nuance is that it’s applied after your Adjusted Gross Income (AGI) is calculated rather than before, so it lowers your tax bill without lowering your AGI — meaning it won’t help with things like IRMAA thresholds or Medicare surcharges the way an AGI-reducing strategy would.
If you itemize, the rules move in the opposite direction. Starting in 2026, your charitable contributions must exceed 0.5% of your AGI before any of it becomes deductible — similar to the 7.5% floor that already applies to medical expenses. In plain terms: the first slice of your giving each year no longer counts.
Where This Gets Interesting for Retirees
If you’re 70½ or older and taking Required Minimum Distributions (RMDs), there’s a strategy that sidesteps this new floor entirely: the Qualified Charitable Distribution (QCD). A QCD lets you send up to $111,000 per person directly from your IRA to a qualified charity in 2026. That amount counts toward your RMD, but — and this is the key part — it’s excluded from your income altogether. It never touches your AGI, so the new 0.5% floor simply doesn’t apply.
An Example
Consider John and Mary, both 72, who together take $40,000 in RMDs and also have $45,000 in dividend and interest income from a taxable brokerage account. Their Adjusted Gross Income (AGI) lands around $180,000 after considering Social Security and other sources of income. Each year, they give $8,000 to their church and a couple of local nonprofits.
If they write that $8,000 in checks the way they always have and itemize it, the new rule requires them to clear 0.5% of their $180,000 AGI — about $900 — before any of it is deductible. So of their $8,000 gift, only $7,100 actually reduces their taxable income.
If, instead, they direct that same $8,000 from their IRA as a QCD, it counts toward satisfying their RMD and it’s excluded from income entirely — not just deducted, but never counted in the first place. Their AGI drops by the full $8,000, with no floor to clear and no itemizing required. For a couple already taking RMDs, it’s simply a more efficient way to give.
Key Takeaways
If you take the standard deduction, the new $1,000/$2,000 write-off is a welcome addition — it finally lets those who haven’t been able to benefit from itemizing get some tax value out of their charitable giving. If you itemize and give consistently, it’s worth checking whether your total giving still clears the new 0.5% AGI floor. And if you’re 70½ or older, this is one more reason QCDs deserve a permanent place in your giving strategy rather than an occasional one.
If you have questions about how these changes affect your giving plan and would like to discuss your financial plan, please Talk With Us!
– Arash Navi, CFA®, CPA, CFP® | Senior Wealth Manager
