Making Your Charitable Giving Count:
What's Changing in 2026

If you're feeling generous today, you're in good company. Today is Minnesota's Give to the Max Day, our state's annual celebration of community giving. Since 2009, Minnesotans have donated over $430 million to local nonprofits through this event—supporting everything from food shelves and theater companies to animal rescues and youth programs. Head over to GiveMN.org to explore thousands of Minnesota organizations doing amazing work.

Important Changes to Charitable Tax Deductions

There are new tax rules taking effect in 2026 which change how charitable donations affect your tax return. If you're planning to support causes you care about, understanding these changes now can help you make the most impact—both for the organizations you support and for your own finances.

What's Changing Starting January 2026?

Congress passed the One Big Beautiful Bill Act this summer, and it includes some notable shifts for charitable giving:

If You Itemize Your Deductions:

1. A New Minimum Threshold - Only donations above 0.5% of your income will count toward your deduction. So if you earn $200,000, the first $1,000 you donate won't reduce your taxes. (Think of it like a deductible on insurance, but for charitable giving.)
2. Slightly Lower Tax Benefit for High Earners - If you're in the top tax bracket, your tax savings per dollar donated drops from 37 cents to 35 cents. Not a huge change, but it adds up on larger gifts.
3. Higher SALT Deduction - The standard deduction is jumping to $15,750 for individuals and $31,500 for couples, but the limit on state tax deductions is going from $10,000 to $40,000, so more people with rising real estate and state income taxes will be itemizing even if you haven't in the last few years.

If You Take the Standard Deduction:

Good news here! Starting in 2026, you can deduct up to $1,000 ($2,000 for couples) in cash donations even if you don't itemize—as long as you give directly to public charities. (Unfortunately, this doesn't apply to donor-advised funds or private foundations.)

Should You Make Donations Before the End of This Year?

You'll likely save more by giving in 2025 if you:

• Earn a high income and typically make significant charitable contributions
• Plan to make a large one-time gift anyway and can afford to do it now
• Want to avoid the new minimum threshold that kicks in next year
• Support multiple causes and can "bundle" a couple years of giving into one

Real-world example: Someone earning $500,000 who donates $50,000 saves about $3,000 more in taxes by giving this year instead of next.

When Might Waiting Until 2026 Make Sense?

Consider spacing out your donations if you:

• Usually take the standard deduction and make smaller donations (the new deduction for non-itemizers could help you)
• Don't typically donate large amounts (under $5,000 annually)
• Have modest income where these rule changes won't significantly affect you

Smart Strategies Worth Considering

Bundling Donations: Instead of giving $5,000 every year, donate $10,000 or $15,000 one year and take a year or two off. This can help you clear the new threshold and maximize your tax benefit.

Donor-Advised Funds: Think of these as charitable savings accounts. You make a large donation now (getting the tax deduction), and then recommend grants to your favorite organizations over time. It's a great way to lock in this year's better tax treatment while maintaining flexibility.

Giving from Your IRA (If You're 70½ or Older): If you're required to make RMDs from your IRAs, you can donate directly from your retirement account to charity—up to $108,000 this year or $115,000 next year. These gifts don't count as income, which means they completely sidestep the new limits on charitable donations. This is often the most tax-smart way to give if you're eligible.

Donating Appreciated Assets: If you have stocks, art, or other investments that have increased in value, donating them directly to charity means you avoid paying capital gains tax while claiming the full current value as a deduction. It's genuinely a win-win.

What Should You Do Now?

The new rules start January 1, so if you're thinking about making significant donations, now's the time to plan. Here's what we suggest:

1. Think about your giving goals for the next year or two
2. Consider whether making larger donations this year makes sense for you
3. If you're over 70½, ask your financial planner/broker about giving from your IRA directly to charity.
4. Reach out to chat about your specific situation—everyone's different

We know that for most of you, charitable giving is about supporting causes that matter to you, not just tax savings. But when the tax rules change, it's worth a conversation about timing to make sure your generosity is working as hard as possible—both for the organizations you love and for your own financial wellbeing.

Questions about your individual situation? Let's talk. 
Schedule a time with your Accountant to discuss your giving strategy*.