The new bill which passed into law on July 4, 2025 (“one big beautiful bill”) adds a new useful tax deduction:
- Those who claim the standard deduction generally can not deduct charitable donations and other deductions from their taxable income. However, beginning in 2026 they will be able to deduct charitable donations of up to $1,000/single or $2,000/couple from their taxable income.
- This deduction is only for donations via cash, credit card, check, and the like. Donations of stock/mutual-funds/ETFs, or property (e.g. old clothing to Goodwill) is not eligible for this special deduction.
- (A few finer points: 1) Donations to a Donor Advised Fund are not eligible for this special deduction. 2) This deduction does not lower your AGI. 3) This deduction does not affect state taxes in any way. 4) This deduction is not relevant and does not help those who itemize their deduction.)
Just to put a dollar figure on this benefit:
- Suppose a couple who takes the standard deduction has $2,000 in charity donations that they make each year. And let’s suppose they are in the 22% tax bracket. The new law will reduce their taxes by $440 each year (2,000 x .22 = 440).
We had a similar (smaller) deduction temporarily added during COVID, and this has now been passed into law as a permanent deduction from calendar year 2026 and onward. We’ll repost this in 2026. Keep this in mind when you’re doing your taxes (in early 2027 and onward) to check for charity donations and receipts. I keep a ‘Charity’ folder in my gmail to track my donations and refer there at tax time.
On a related note, it’s worth flagging that the same bill adds a negative provision for those who itemize their deductions:
- Charity donations only get deducted in amounts exceeding .5% of your AGI. For example, a person or couple who has an AGI of $100,000 who donates $5,000 to charity will only get a $4,500 deduction since the first .5% ($500) doesn’t get deducted. This change also goes into effect starting in calendar year 2026.
- (There’s a similar provision of 1% for charity donations by corporations. I believe this only affects C-Corporations, and not pass-through entities like LLC’s or S-Corporations.)
I suppose the new .5% exclusion is meant to cover the cost of allowing standard filers to get the $2,000. Or something like that.
In any case, most tax filers take the standard deduction and can potentially gain from the new charity deduction. Personally, I’ve been itemizing lately, and I’ll get hit with the .5% exclusion.
Dumb question. If you donate a percentage of a sale on say eBay, does that count since it becomes a dollar amount or is it considered donating property?
Should this and related posts be tagged like Big Beautiful Bill (as a prefix or suffix) to make law-related updates easier to find?
https://www.doctorofcredit.com/irs-standard-deduction-filers-can-deduct-1000-2000-in-charitable-donations-begins-2026/
https://www.doctorofcredit.com/new-law-loosens-tax-form-requires-1099-misc-to-2000-1099-k-to-20000/
I’ll just keep them under #taxes
Just end the personal income tax altogether and be done with the 80,000 pages of IRS regulations that even the IRS itself doesn’t understand.
You know what is going to happen, though.
Step 1, eliminate income tax when republicans in power and replace with federal sales tax.
Step 2, bring back income tax when democrats are in power.
Step 3, now Americans are stuck with a federal sales and federal income tax.
How about i donate 1000 in cash to the guy on the street who then loses it and i find it later? Easy deduction
I’m just here for the comments
omg, haha, throw the dog a bone. make the poor pay for charity.
If donating securities will work for this deduction, then instead of giving cash to charity, see if you can transfer low-basis stock to your charity of choice.. You should be able to write off the market value on date of transfer and not have to pay any taxes on the unrealized gain.
@Curmudgeon from what I’ve read about it this new charitable deduction that you’ll be able to take with the standard is that it is for cash only donations and does not include appreciated stocks since that is considered non cash or donations to things like a donor advised fund are also not included from what I’ve read about it. You can still get a charitable deduction for appreciated stocks or non cash donations if you itemize but as the article mentions there will be a new floor you’re subject to.
Donating securities does not work for this deduction: $1,000 Charity Donation Deduction in the 2025 Trump Tax Law
Added a note to clarify, thx
That’s a raw deal. Thanks for the link
Do we need to register charity to fully take advantage of this? Asking for a friend.
Daily reminder 99% of all “charities” are scams and operate as businesses to enrich themselves or special interests
Daily reminder 99% of us can do f*ing nothing about it 🙁
You can NOT donating.
A church sold a piece of land to DR Horton to build house for $3 million dollars right next to me. I wonder how much the pastor pocketed the money. Church is nothing but a money laundering machine. They should not be tax-exempt.
Probably half of it. Selling eternal life after death is world’s oldest profession, next to ….
To quote Mark Rutte, I’ll take the 440 my Orange daddy
You get next to nothing, they get millions. Spoken like a true ignorant american.
The US tax system is just an income redistribution system from rich to poor. Better than CC reward programs which are the reverse.
Do you mean millions of tipped and o/t workers getting a substantial tax break?
No, I mean the people who make millions daily getting their taxes cut. Pathetic brown-noser or would it be orange?
Frank, Invent something or provide a service others are willing to buy. Pathetic is what we call people who are envious or derogatory of others who succeed but are unwilling to do anything to make their life better.
less than 3% of workers are in tipping occupations, the median income being like 32k. The substantial tax break is going to benefit fewer than you might think.