The One Big Beautiful Bill (OBBB) brought a wide range of tax changes for individuals and businesses, and charitable contributions were no exception. Whether you itemize deductions or take the standard deduction, there are new opportunities—and new limits—to keep in mind.

At Molen & Associates, we help clients integrate charitable giving into their tax planning so they can maximize both their impact and their tax savings. Here’s what’s changed under the OBBB.

1. New Above-the-Line Deduction for Non-Itemizers

Before the OBBB, taxpayers who didn’t itemize deductions generally couldn’t deduct charitable contributions (except for a temporary COVID-era provision in 2020–2021).

Starting after 2025, the OBBB allows:

• Single filers: Deduct up to $1,000 in charitable contributions.
• Married filing jointly: Deduct up to $2,000 in charitable contributions.

Key points:

• This deduction applies even if you take the standard deduction.
• There’s a 5% of AGI floor—meaning if your AGI is $100,000, the first $500 of contributions wouldn’t count toward the deduction. Only the amount above that is deductible.
• Applies to cash donations to qualifying charities; property donations have different rules.

2. Higher Phase-Out Thresholds for Itemizers

For taxpayers who itemize deductions, the OBBB did not change the general percentage-of-AGI limits for charitable contributions (60% for cash gifts to public charities, 30% for non-cash property, 20% for gifts to certain private foundations).

However, for very high-income taxpayers in the 37% tax bracket, the OBBB added a new limitation:

• For incomes over $751,000 (joint) or $500,000 (single), itemized deductions are reduced by 2% of the amount over the threshold. This can effectively reduce the benefit of large charitable contributions for the wealthiest taxpayers.

3. Strategic Giving Is Now Even More Important

These changes create more planning opportunities for taxpayers at all income levels:

For Non-Itemizers

• You can now get a tax benefit for donations without exceeding the standard deduction threshold.
• Consider timing donations in larger amounts over several years to meet the 0.5% AGI floor.

For Itemizers

• If you are near the new high-income limits, charitable bunching—making multiple years of donations in one year—may help you get the full benefit before the 2% reduction kicks in.
• Donating appreciated stock instead of cash may still be a highly tax-efficient strategy, avoiding capital gains tax while claiming the charitable deduction.

4. Business Charitable Contributions

The OBBB did not make major changes to corporate charitable deduction rules, but business owners should remember:

• C Corporations can generally deduct up to 10% of taxable income for qualifying charitable gifts.
• Pass-through entities pass deductions to owners, subject to the individual limits above.
• Combining charitable giving with marketing efforts (such as event sponsorships) may allow part of the expense to be classified as advertising rather than a charitable deduction—potentially bypassing AGI limits.

Quick Reference Table: Charitable Contribution Changes

Final Takeaway

The OBBB makes charitable contributions more beneficial for non-itemizers, but introduces new limits for the highest earners. Smart planning—such as bunching contributions, donating appreciated assets, and coordinating with your overall tax strategy—can help you get the most from your generosity.

Want to maximize your giving impact and your tax savings?

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