By Anne Calder
Vice President of Philanthropy

Hidden within headlines about federal tax changes are provisions that will affect charitable giving for American taxpayers. As a new year begins, it’s a good time to review your plans and position yourself to give generously and take advantage of available tax benefits—especially with new rules taking effect in 2026.

The One Big Beautiful Bill Act is broad in scope and does impact how some people approach charitable giving. None of these changes should discourage giving, but they make thoughtful planning more important. Current income tax brackets will remain in place, the higher standard deduction continues, and donors may still deduct cash gifts of up to 60 percent of adjusted gross income. In addition, all taxpayers can now claim the universal standard deduction of up to $1,000 per individual or $2,000 per married couple, even if you do not itemize.

For those who do itemize, beginning in 2026, charitable gifts will be deductible only after exceeding a new minimum threshold of 0.5 percent of adjusted growth income. Donors in the highest bracket will see the value of their charitable deduction reduced modestly.

These changes are leading many donors to use donor-advised funds as a tool to preserve tax benefits while maintaining regular support for the organizations they value. Because contributions are recognized in the year they are made, a donor-advised fund allows donors to combine several years of giving into a single contribution, potentially clearing deduction thresholds while distributing charitable grants over time.

As you plan for the year ahead, consider the things you want to change or preserve through charitable giving for the causes you value, consult your local community foundation and advisors as needed, and take proactive steps to ensure your giving remains both meaningful and financially smart in the year ahead.

This piece was originally published by Tower Trust & Investment Company.