Giving to charity used to be simple at tax time. Write the check, keep the receipt, deduct the amount. The One Big Beautiful Bill Act changed the math starting this year, and the December moves worth making are narrower than they were.
What the new floor takes
Itemizers can deduct charitable gifts only above 0.5% of adjusted gross income. There was no floor before the 2025 law.
The cost is easy to size. Someone with $200K of income who donates $10K in 2026 cannot deduct the first $1K.
The floor scales with income, so a bigger paycheck means a bigger slice of the gift falls outside the deduction.
High earners face a second trim. Households in the top 37% bracket see the value of the break capped at 35%, a 5.4% haircut on itemized deductions for that group.
The 0.5% Floor Grows With Income
Charitable deduction lost on a $10K gift, 2026 tax year
Line chart. Deduction lost ($). $100K: Deduction lost ($) $500. $200K: Deduction lost ($) $1K. $300K: Deduction lost ($) $2K. $400K: Deduction lost ($) $2K.
Source: CNBC, Fidelity Charitable
Most taxpayers do not itemize, and for them the law went the other way. Standard deduction filers can now deduct up to $1K in cash gifts, or $2K for a married couple filing jointly.
A married couple in the 22% bracket donating $2K cuts their federal tax bill by up to $440. Only cash counts. Donations of stock, or gifts routed to a donor-advised fund, do not qualify for this one.
Bunching clears the floor once
Because the floor resets each tax year, spreading gifts over several years lets it apply more than once. Concentrating several years of giving into a single year pays it once.
Fidelity Charitable runs the numbers on a donor with $200K of income. Giving $5K a year for three years deducts less than putting the same $15K in one year, by $2K.
Bunching Three Years of Gifts Deducts More
Deductible portion of $15K of giving at $200K AGI, 2026 tax year
Bar chart. Deductible amount ($). Bunched into one year: Deductible amount ($) $14K. Spread over three years: Deductible amount ($) $12K.
Source: Fidelity Charitable
A donor-advised fund makes this practical. It works like a charitable savings account, taking the full contribution and deduction now while grants go out to charities over later years.
Bunching also helps clear the other hurdle, since the 2026 standard deduction sits at $32.2K for couples. Many annual gifts below that line earn no tax benefit.
Appreciated stock held more than a year is the sharper asset to give. The deduction is based on fair market value, and the capital gains tax on the growth never comes due.
What still works before Dec. 31
Savers age 70 and a half or older can route money straight from an individual retirement account to a charity, up to $111K for 2026. The amount never shows up as taxable income, so neither the floor nor the 35% cap touches it.
The transfer counts toward required minimum distributions, the withdrawals the government forces from retirement accounts starting at age 73. Donor-advised funds are not eligible recipients.
Other deadlines sit alongside giving. The 401(k) contribution limits for 2026 top out at $24.5K, and IRA contributions at $7.5K, with higher limits for savers 50 and older.
Roth conversions, which move pretax retirement money into an account that grows tax-free, also have to be completed by year-end to count for 2026. Conversions were up 41% through March 31 versus a year earlier, on Fidelity data covering 19.6M accounts.
Pairing a conversion with a large gift of appreciated stock in the same year can offset much of the resulting tax bill.
Estimated tax payments are the other lever. A taxpayer who expects a bigger 2026 bill can base payments on 110% of last year's liability or 90% of this year's, and park the difference in short-term fixed income until the balance comes due.
Timing matters because some gifts take time to complete. Fidelity Charitable warns that waiting until the final weeks of the year limits options, and that some donations take longer to process.
