This summer, new federal tax legislation was signed into law that will reshape how Americans give to charity. While the bill makes broad changes to the tax code, some of the most significant updates directly affect charitable giving — and they may influence how you choose to make your gift to St. David’s this year.
Whether you take the standard deduction or itemize, these changes will impact how and when you give.
Here’s what they mean for you:
A new charitable deduction for non-itemizers
- Beginning in the 2026 tax year, taxpayers who take the standard deduction will also be able to claim a charitable deduction: up to $1,000 for single filers and $2,000 for joint filers.
- Applies only to cash donations made directly to qualified charities (not donor-advised funds or private foundations).
What this means: If you’re one of the 90% of Americans who don’t itemize, you’ll now receive a tax benefit for giving. Be sure to save your receipts so your generosity is counted.
New limits for itemizers
- Beginning in 2026, those who itemize will see two new restrictions:
- 0.5% AGI floor: Charitable deductions only apply to contributions above 0.5% of your adjusted gross income.
What this means: Bunching your giving, whether directly to a charity or through a DAF, can result in a higher deduction. - 35% deduction cap for high-income donors: The value of deductions for those in the top tax bracket (37%) will be capped at 35%.
What this means: Those in the highest tax bracket may consider making a gift before 2026 to maximize their tax benefit.
Extensions of earlier tax revisions
- Several elements of prior tax law have been extended or made permanent, including:
- A higher standard deduction ($15,750 for single filers; $31,500 for joint filers in 2025).
- A permanent 60% AGI limit on cash donations.
- An increased estate and gift tax exemption ($15 million single / $30 million joint, beginning in 2026).
What this means: Many estates will no longer be subject to federal estate taxes, so lifetime giving will be the primary way to receive charitable tax benefits for most families.
Corporate giving floor
Beginning in 2026, corporations will only be able to deduct charitable contributions that exceed 1% of their taxable income.
What this means: Businesses that support St. David’s may want to review their giving levels to ensure they can continue to take full advantage of charitable deductions.
How to plan your giving
- If you take the standard deduction: You will benefit from the new universal charitable deduction starting in 2026.
- If you itemize: Consider strategies such as bunching donations or making larger gifts in 2025 to maximize your tax advantage.
The Takeaway
These changes are designed to broaden charitable giving for everyday taxpayers while limiting certain benefits for the very highest-income households. With thoughtful planning, you can continue to support St. David’s in ways that align with both your philanthropic goals and your financial well-being.
