If you’ve been thinking about giving back — whether it’s to your church, your community, or a cause that hits home — 2025 is your year to make it count.
Starting in 2026, The new One Big Beautiful Bill Act (OBBBA) is shaking up how charitable giving works. Some changes will help small donors, but for business owners and big givers, the new rules mean you could lose some of those tax breaks you’ve been used to.
What that means:
Every dollar you give to a qualified charity in 2025 could directly reduce your taxable income, often providing a larger benefit than what will be available next year.
So before the game changes, let’s break down what’s coming, what’s staying the same, and how you can move smart in 2025 to make every dollar count.
2025: The Last Year of the “Old Rules”
Right now, charitable giving still plays by the old playbook — and it’s definitely more generous. Here’s what that means for you this year:
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You can deduct cash donations up to 60% of your adjusted gross income (AGI) if you itemize.
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There’s no minimum giving threshold to claim a deduction.
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The value of your deduction is based on your full tax bracket (which could be as high as 37%).
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Corporate giving rules allow deductions up to 10% of taxable income without a minimum.
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You can continue donating appreciated stock, property, or other non-cash assets and deduct fair market value without paying capital gains.
2026: The New Rules Hit Different
Change
What It Means
Example
New floor for deductions
You can only deduct charitable contributions that exceed 0.5% of your AGI.
If your AGI is $200,000, you must donate more than $1,000 before any of it becomes deductible.
Cap on high-income benefit
The tax savings from charitable giving is capped at a 35% rate, even if your marginal bracket is higher.
If you’re in the 37% bracket, your deduction will save you less per dollar donated.
Corporate giving floor
Businesses can only deduct contributions above 1% of taxable income (and still subject to the 10% cap).
A business with $500,000 taxable income must give over $5,000 before deductions start counting.
New non-itemizer deduction
Standard deduction filers can claim up to $1,000 (single) or $2,000 (joint) for cash donations.
Helpful for modest givers — but small compared to full itemized deductions.
So while charitable giving isn’t going away, you’ll need to give more to get the same benefit.
Here’s a quick comparison:
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In 2025, a $10,000 donation by someone in the 35% tax bracket could save about $3,500 in taxes.
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In 2026, that same $10,000 donation might save only around $3,000 or less once the new floor and cap take effect.
It may not sound like much — but for families, business owners, and consistent donors, that difference can add up fast over time.
Smart Strategies to Maximize Charitable Contributions in 2025
(Before the 2026 OBBBA Changes Take Effect)
1. “Bunch” or Pre-Fund Multiple Years of Giving
Instead of spreading donations out evenly each year, combine two or three years of donations into 2025.
That move can help you:
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Push past the standard deduction limit this year.
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Claim a bigger itemized deduction while the rules are still favorable.
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Secure more value from your generosity before the new restrictions hit.
Example: Instead of donating $5,000 in 2025, 2026, and 2027, donate $15,000 in 2025. You’ll likely qualify to itemize this year — meaning a bigger tax break — and you can spread those funds to your charities over time.
2. Use a Donor-Advised Fund (DAF)
If you want to front-load your giving but still spread it out over a few years, a Donor-Advised Fund (DAF) might be your best move.
You can drop the money into the fund this year, take the full deduction in 2025, and decide later which charities receive the cash.
Funding a DAF before the new rules kick in helps you:
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Lock in the current higher deduction limits.
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Avoids the 0.5% AGI floor that starts in 2026.
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Simplifies recordkeeping for multiple charities.
3. Donate Appreciated Assets Instead of Cash
Donating stocks, crypto, or real estate that have increased in value can stretch your giving power.
Here’s how it helps you:
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You get a deduction for the full fair market value of the asset.
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You avoid paying capital gains tax on the appreciation.
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You free up cash while still making a meaningful contribution.
Example:
If you bought stock for $3,000 and it’s now worth $10,000, donating it directly saves you from paying capital gains on the $7,000 gain and gives you a $10,000 deduction.
4. Give Directly from Your IRA (Age 70½ and Up)
If you’re 70½ or older, you can donate directly from your IRA — up to $100,000 per year — using a Qualified Charitable Distribution (QCD).
This move can help you:
Satisfy your Required Minimum Distribution (RMD).
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Satisfy your Required Minimum Distribution (RMD).
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Keep the donation out of your taxable income.
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Lower taxes on Social Security or Medicare premiums.
5. Consider a Charitable Trust or Foundation (For High-Net-Worth Donors)
If you’re thinking long-term, setting up a Charitable Remainder Trust (CRT) or Private Foundation can help you control and grow your giving.
Here’s how it helps you:
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You can claim a deduction this year while setting aside funds for future charitable work.
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Allows assets to grow tax-deferred for future giving.
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You create a legacy of giving that your family can continue.
Time Your Donations Before Year-End
Make sure your donations are completed by December 31, 2025 — not just pledged. The IRS goes by the date of transfer, not the date of promise.
Here’s how to make sure it counts:
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Online donations count the day the transaction is processed.
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Mailed checks must be postmarked by December 31.
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Stock or crypto transfers can take several days — don’t wait until the final week of December.
Getting your timing right ensures your generosity counts for 2025 — not 2026.
This year, your generosity can still be a powerful financial move. Whether you give cash, stock, or through a donor-advised fund, planning your giving before the year ends can maximize both your impact and your savings.
Ready to make your generosity part of your 2025 tax strategy?
Credence Tax Services LLC helps individuals and business owners plan smarter — making sure every dollar you give works harder for you and your community.