Upcoming Tax Changes: One Big Beautiful Bill Act
Dec 03, 2025
Upcoming 2026 Tax Law Changes & What They Mean for You as a Donor
With changes to the U.S. tax code set to kick in on January 1, 2026 under the One Big Beautiful Bill Act (OBBBA), many of you may be thinking about how (and when!) to give to the causes you care about as the end of the year approaches. Depending on your tax plans, 2025 may be a “last chance” for you to give under more advantageous conditions. Here’s what you should know.
What’s changing starting January 1, 2026:
- New deduction available for non-itemizers. Individuals who claim the standard deduction (i.e. people who do not itemize) on their federal tax returns will now be eligible for a charitable deduction on cash donations of up to $1,000 for individuals and $2,000 for joint filers to eligible public charities. (Donor Advised Fund gifts and private foundations are not eligible for this deduction.)
- 0.5% “floor” for itemized deductions. If you do itemize, in 2026 you will only be able to deduct your total charitable contributions above 0.5% of your Adjusted Gross Income (AGI). That means smaller donations may sometimes no longer count.
- Reduced tax benefit for high-income donors. For itemizers in the top 37% tax bracket, the effective tax benefit from charitable deductions will drop from 37% to about 35%. So if you’re in that tax bracket and you contribute $1,000, you will receive a $350 deduction rather than the current $370 in 2025.
To summarize:
Making a modest charitable gift in early 2026, of up to $1,000 for individuals or $2,000 for joint filers, may be more advantageous.
But if you are a higher-income household making larger gifts or itemizing, giving now in 2025 may be better before the 0.5% floor and reduced 35% deduction rate take effect.
Consult your tax advisor!
Tax situations vary widely, and the VHS is not able to provide official legal or tax advice. Consult your financial advisor to help you make the best plan, particularly for gifts of assets, large donations, or Donor-Advised Funds.
Will you support us in 2025?
At the Vanderburgh Humane Society, our mission is powered by supporters who believe in the work we do. With the 2026 tax changes looming, a gift made before December 31, 2025 could significantly stretch further — for you, for us, and for the pets & people we serve. Will you make a gift now to maximize your impact?
Thank you for being part of our “pack!”
Sources and Additional Resources for Donors:
https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions
https://www.ubs.com/global/en/wealthmanagement/insights/marketnews/article.2859483.html
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