New Charitable Giving Rules in 2025: What the “One Big Beautiful Bill” Means for You

By Scott Smith • 08/08/2025

On July 4, 2025, the “One Big Beautiful Bill” (OBBB) was signed into law—bringing significant changes to the tax landscape, especially for charitable giving. For individuals and families who incorporate philanthropy into their financial plans, these new provisions offer both opportunities and potential pitfalls.

Here’s what you need to know:

1. New Deduction for Non-Itemizers

Starting in 2026, individuals who don’t itemize deductions can still claim a charitable deduction—up to $1,000 for single filers or $2,000 for married couples. This change could encourage broader participation in charitable giving, regardless of income or filing status.

2. Caps for High-Income Donors

For those in the top tax bracket, the deduction for charitable contributions will be capped at 35% starting in 2026 (down from 37%). If you’re planning a significant gift, 2025 may be a smart year to act.

3. Minimum Giving Threshold for Deductions

Beginning in 2026, deductions for charitable giving will only apply to contributions that exceed 0.5% of your adjusted gross income (AGI). For corporations, the threshold is 1% of taxable income. This change makes strategic “gift bunching” or larger, less frequent donations more valuable.

4. Estate and Gift Tax Exemption Increases

The estate and gift tax exemption jumps to $15 million in 2026, with future inflation adjustments. This means lifetime charitable gifts may continue to be one of the most effective tools for reducing future estate taxes.

5. SALT Deduction and School Giving Credits

The SALT deduction increases from $10,000 to $40,000 starting in 2025, phasing out for incomes over $500,000.
• Beginning in 2027, a new $1,700 tax credit is available for donations to organizations that fund K–12 school scholarships.

Planning Ahead

With so many changes on the horizon, 2025 represents a critical window to review and potentially accelerate your charitable giving. If you’ve been considering a donor-advised fund, estate gift, or year-end contribution, now may be the time.

At Pathworks Financial, we’re here to help you align your giving with both your personal values and tax strategy. Let’s connect to explore the best path forward.

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