Many charities promote that donations are tax-deductible, however most individuals don’t deduct donations on their taxes. That’s as a result of over 80% of taxpayers use the usual deduction, and so they don’t get to deduct donations to charities after they don’t itemize. Folks donate as a result of they assist the trigger, whether or not they get a tax deduction or not.
I’m within the 80%. I don’t observe my donations as a result of I do know I gained’t deduct them.
It will change in 2026.
New Deduction for Non-Itemizers
A few of you could recall that Congress allowed non-itemizers to deduct a small quantity of their charitable donations throughout COVID. It was initially a one-off $300 deduction in 2020 (see CARES Act 2020 Charity Donation Deduction: $300 or $600 for Married?). Congress recreated it with some tweaks as one other one-off for 2021 (see 2021 $300 Charity Deduction For Non-Itemizers $600 Married).
The brand new 2025 Trump tax regulation resurrected the 2021 model and raised the allowed quantity from $300 to $1,000 ($2,000 for married submitting collectively). It’ll be ongoing this time, beginning in 2026, with no preset finish date.
All the opposite phrases from 2021 are carried over to this new iteration. This deduction is just for individuals who take the usual deduction. The donations should be in money, not essentially bodily money, however not home items, automobiles, or appreciated securities. Checks, card funds, and financial institution debits are all OK. The donations should be made on to charities, to not a donor-advised fund.
There’s no revenue restrict or phaseout.
Some locations reported that this deduction is “above-the-line.” It’s not true. This new deduction doesn’t decrease your AGI. It doesn’t make it simpler so that you can qualify for different tax breaks. It doesn’t have an effect on state taxes.
Decrease Deduction for Itemizers
For those who itemize deductions, this new $1,000/$2,000 deduction isn’t accessible to you. You’ll proceed to incorporate your charity donations as itemized deductions on Schedule A. Nevertheless, the brand new 2025 Trump tax regulation provides a ground in your charitable contributions deduction at 0.5% of your AGI, additionally beginning in 2026, with no preset finish date.
This ground is just like how the medical bills deduction has a ground at 7.5% of AGI. It reduces the quantity you’ll be able to deduct by 0.5% of your AGI. For instance, suppose your AGI is $100,000. 0.5% of $100,000 is $500. After this modification goes into impact in 2026, when your whole donations to charities add as much as $4,000, you’ll be able to deduct solely $3,500 as an itemized deduction.
QCD
The brand new 2025 Trump tax regulation didn’t make any modifications to Certified Charitable Distributions (QCDs).
For those who’re over 70-1/2, QCDs out of a Conventional IRA are nonetheless one of the best ways to donate to charities. QCDs depend towards the RMD, however they don’t increase your AGI. You don’t need to itemize to make QCDs. Nor are you required to scale back your deduction by 0.5% of AGI. The annual restrict for QCDs is 100 instances larger than this new $1,000/$2,000 deduction for non-itemizers.
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