Many people aim to write checks to their favorite charities sometime before Dec. 31, as part of year-end giving. Yet, key tax changes mean you could want to shake things up in 2025.
This year, some quirky new tax rules mean that one group of tax filers might want to give more money in 2025 than they planned. And another group could be better off pushing their cash donations into January.
Yep, nothing is simple when it comes to the new rules in the One Big Beautiful Bill Act, which was signed into law by President Donald Trump on July 4.
We’re looking at two distinct tax scenarios for charitable giving in 2025. It boils down to whether you itemize deductions or take the standard deduction, as most tax filers do.
Beginning in 2026, tax filers who claim the standard deduction may be allowed to take a new above-the-line deduction for cash contributions to qualifying charities. You will not need to itemize deductions to claim this new tax break.
The new deduction — which would apply to your 2026 federal income tax return that’s filed in 2027 — is limited to $1,000 for single filers and $2,000 for married couples filing jointly, per year. Experts say there is no provision to adjust these amounts for inflation.
“This deduction is only available for cash contributions made to qualified charitable organizations, excluding donor-advised funds and supporting organizations,” said Tom O’Saben, enrolled agent and director of tax content and government relations for the National Association of Tax Professionals.
But remember, this new tax break will not apply to your 2025 return. So, some tax planners are recommending that some who take the standard deduction write checks to charities in 2026, instead of rushing to give in late 2025.
George Smith, a certified public accountant with Andrews Hooper Pavlik in Bloomfield Hills, said tax filers who don’t itemize — and he’s one of the non-itemizers — need to be aware of the new $1,000 and $2,000 deduction for non-itemizers beginning in 2026.
Those making donations can give the money by cash, credit card or check in 2026 to be able to claim a deduction for a charitable donation.
Elizabeth Young, director of tax practice and ethics with the American Institute of CPAs, pointed out that cryptocurrency, including bitcoin, is not considered “cash” for this deduction. Donating bitcoin would be treated as a non-cash property donation and subject to different rules.
Young also noted that non-cash donations, like donating clothing or other goods, will not qualify for the new tax deduction for non-itemizers.
On your 2025 federal income tax return, you generally can only deduct charitable contributions if you itemize. If you claim the standard deduction — and donate money in 2025 — you’re not getting any tax break for that charitable contribution.
Waiting a few weeks in this case could save you some tax dollars. If you’re in a 22% tax bracket, you could be looking at savings of $220 if you’re single and you donate $1,000 in 2026. The tax break would jump to $440 in this example, if you’re married and you donate $2,000 in 2026.
It’s a pretty major change for a large group of people, given that roughly 90% of individual tax filers claim the standard deduction and do not itemize.
Tax filers will need to keep records. And those making these cash donations will need acknowledgement from charities for gifts that exceed $250. You’ll want a Contemporaneous Written Acknowledgement that indicates that you received no goods or services.
Some advisers are even proclaiming that “January is the new December” for tax filers who do not itemize.
A single person, for example, who typically makes a $500 contribution every year in December might want to simply write a check for $500 in January and then give $500 as usual in December 2026. That way you’d get the full $1,000 above-the-line deduction on your 2026 federal income tax return if you don’t itemize.
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The strategy is different for some tax filers who expect to be able to itemize their deductions when filing 2025 federal income tax returns next year. Many in this group will want to stick with the Dec. 31 deadline for making a charitable contribution in 2025.
For taxpayers who itemize, it’s essential to understand that a new floor will be put into place on your 2026 income tax return filed in 2027.
Beginning in 2026, only the amount of total charitable contributions that exceeds 0.5% of your adjusted gross income is deductible. The 0.5% floor applies only to those who itemize charitable deductions on 2026 federal income tax returns and afterward.
“Some taxpayers may adapt their donation strategy to maximize tax benefits, for instance, by frontloading their giving into 2025 to avoid the new floor on charitable deductions and limitation on overall itemized deductions that both begin in 2026,” according to the Tax Foundation, an independent tax policy research organization.
Young said most likely taxpayers will see the changes built into Schedule A for 2026.
How will the new floor work?
O’Saben offered this example: If your adjusted gross income is $100,000, the first $500 of charitable contributions is not deductible; only the amount above $500 is deductible, subject to the usual AGI percentage limits. Someone whose AGI is $300,000 would only be able to deduct the amount that exceeds $1,500.
How does the new limitation on cash contributions to charities work?
Taxpayers who itemize, O’Saben said, will only be able to deduct cash contributions up to 60% of your adjusted gross income each year, subject to other limitations, beginning in 2026.
You cannot do both. Taxpayers either itemize and claim the appropriate deduction for charitable contributions, or they take the standard deduction and take the adjustment to income, O’Saben said. They cannot use both strategies and tax breaks in the same year.
Many game-changing tax breaks packed into the One Big Beautiful Bill Act will hit when people file their 2025 tax returns next year — including a tax break on some overtime pay, a tax break on tips, a new deduction on car loan interest, and an extra deduction for those age 65 and older.
The big changes relating to charitable contributions hit in 2026. Even so, run your own numbers now before 2025 comes to a close to see what charitable giving strategy works best for you this year.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Tax law changes might change when you should donate to charity
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