What changed under OBBBA for 2026
Three changes to know before you plan your giving.
A new 0.5% AGI floor
If you itemize, you can deduct only the portion of your giving above 0.5% of your AGI.
A 35¢ cap in the top bracket
In the 37% bracket, deduction value is capped at 35 cents per dollar, down from 37.
A new non-itemizer deduction
Standard-deduction filers can now deduct up to $1,000 / $2,000 in cash gifts to public charities.
Frequently asked questions
Does my gift to a DAF qualify for a charitable tax deduction?
Your gift to a DAF qualifies for a deduction only if you itemize deductions instead of taking the standard deduction.
Starting in 2026, itemizers can deduct only the portion of their charitable giving that exceeds 0.5% of adjusted gross income (AGI). For example, if your AGI is $200,000, the first $1,000 you give in a year is not deductible — only the amount above that is.
Can I deduct a donor-advised fund contribution if I don't itemize?
No. A new deduction for non-itemizers took effect in 2026 — up to $1,000 for single filers and $2,000 for joint filers — but it applies only to cash gifts made directly to public charities.
Contributions to donor-advised funds and most private foundations are excluded from this provision.
How much of a charitable tax deduction can I take?
Cash gifts to public charities, including gifts to a donor-advised fund, are deductible up to 60% of AGI. This limit was made permanent in 2026; it had previously been scheduled to drop to 50%. Gifts of appreciated assets are deductible up to 30% of AGI.
Giving that exceeds these limits in a given year can be carried forward and deducted over the following five years.
What are capital gains taxes?
A capital gains tax applies to the profit made from selling an asset — the difference between the sale price and the cost basis. Assets held more than a year are taxed at long-term rates (0%, 15%, or 20%, depending on income); assets held a year or less are taxed as ordinary income.
How can I reduce capital gains by giving to charity?
Donating an asset you've held for more than a year lets you deduct its full fair market value. Neither you nor the receiving charity pays tax on the appreciation, since the charity is tax-exempt. Donating cash doesn't offset capital gains in the same way.
What's the difference between fair market value and cost basis?
Fair market value is the price your asset would sell for in the current market. Cost basis is the original purchase price, adjusted for factors like stock splits or returns of capital. The IRS uses the difference between the two to determine your capital gain.
How can I reduce estate tax?
Donating assets to your donor-advised fund now or including bequests to your donor-advised fund in your estate plan can reduce the value of your estate and thus the estate tax owed.
The federal estate and gift tax exemption for 2026 is $15 million per individual, up from roughly $13.99 million in 2025. Estate tax strategy is complex; a qualified estate planner should be part of this conversation.
Tax Calculator
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Where to go next
Charitable tax deductions in 2026
The complete strategy guide — bunching, timing, every OBBBA figure, and the 2026 planning form.
Is a donor-advised fund worth it?
How a DAF works and whether it fits your giving strategy.
1Please note: The information provided here is not intended to be relied upon in lieu of tax or legal advice. Consult with a tax advisor or attorney for information related to your specific situation.
2AGI: Adjusted gross income is an individual's total gross income minus specific deductions. AGI is used to calculate taxable income, which is AGI minus allowances for personal exemptions and itemized deductions.
3Please note that the CARES Act expired at the end of 2021.
4Internal Revenue Service
5Internal Revenue Service. Publication 550: Investment Income and Expenses, Page 43. Accessed Jan. 13, 2021.
