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President Donald Trump’s “big beautiful bill” enacted trillions in tax breaks that could benefit wealthy Americans — but some will see a smaller deduction for charitable gifts starting in 2026, experts say.
When you itemize tax breaks, you can claim the charitable deduction, depending on earnings and type of asset given. But Trump’s spending package added two key changes for itemizers.
Starting in 2026, there will be an itemized charitable deduction “floor,” which only allows the tax break once it exceeds 0.5% of your adjusted gross income. The new legislation also caps the benefit for filers in the top 37% income tax bracket, beginning in 2026.
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These changes require “proactive planning” for 2025 while the more generous charitable deduction is still available, according to certified financial planner Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts.
For example, some clients may consider “bunching” multiple years of donations into 2025 via a donor-advised fund, he said. This offers an upfront deduction and works like a charitable checkbook for future gifts.
Trump’s legislation also added a new charitable deduction for non-itemizers who donate cash starting in 2026. That tax break is limited to $1,000 for single filers or $2,000 for married couples filing jointly. If 2025 gifts aren’t time sensitive, you can claim the benefit by holding the donation until January, Jastrem said.
Reduce taxes with a ‘very simple solution’
Justin Miller, partner and national director of wealth planning at Evercore Wealth Management, said the changes in Trump’s new legislation could be significant for top earners.
For example, if your adjusted gross income is $1 million, which is the 37% tax bracket, and you donate $100,000 to charity in 2025, the charitable deduction could save you $37,000, he wrote in a LinkedIn post last week.
By comparison, the same $100,000 gift may only be worth $33,250 in 2026 under the two new provisions enacted via Trump’s legislation, he said.
Here’s how it works: The 0.5% floor cuts the $100,000 gift by $5,000 to $95,000. The second new provision reduces the $95,000 donation by 2/37, which is $5,135.13. When added together, the limitations drop the deduction to $89,864.87. That figure multiplied by the 37% bracket is about $33,250, which is $3,750 less than $37,000.
“Many people, even those making $1 million, care about [saving] $3,750,” Miller told CNBC. “Especially if it’s a very simple solution of giving that money away this year … versus next year.”
Miller also recommends using a donor-advised fund in 2025 to “front load the next three to five years” of charitable donations. In many cases, higher earners already have these accounts set up, so they can easily fund them by year-end, he said.
