Taxes, Charitable Giving, and the One Big Beautiful Bill Act
A Year-end Tax Guide
The recent passage of the One Big Beautiful Bill Act (OBBBA) makes some notable changes to taxes and charitable giving. There are three things we want to highlight for you, each of which goes into effect in 2026:
First, only charitable contributions that exceed .5% of your adjusted gross income (AGI) will be deductible. For example, if your AGI is $100,000, the first $500 you donate is not tax-deductible. So if you itemize, it may be advantageous to give more this year to take advantage of the full deduction.
Second, for people in the top tax bracket (37%), itemized reductions will be reduced further via a complicated formula. In essence, it reduces the effective tax benefit from 37% to 35%. Again, it may be beneficial to “bunch” your donations by giving more this year to maximize tax benefits.
Third, individuals and couples who do not itemize will be able to claim a charitable deduction of up to $1000 ($2000 for joint couples). Even if you do not itemize, you can reduce your taxes through charitable giving!
If you want to learn more about any of these changes, the best thing you can do is talk to your tax advisor. We are not tax professionals, but we want you to benefit fully from your generosity to Bethany House and other charities!
