President Trump’s “big beautiful bill” is set to reshape charitable giving for millions of taxpayers starting in 2026—here’s why savvy investors and advisors need to pay close attention now.
The headline grabber? A new, permanent charitable deduction for non-itemizers, allowing up to $1,000 for single filers and $2,000 for married couples filing jointly. This is a game-changer because, according to the IRS, about 90% of taxpayers currently take the standard deduction and don’t benefit from charitable write-offs. This move effectively opens the door for a vast majority of filers to gain tax advantages on their cash donations without the hassle of itemizing.
Why does this matter? Historically, charitable deductions were largely the domain of itemizers—those with enough deductible expenses to surpass the standard deduction threshold. The pandemic-era temporary deduction (up to $300 for singles, $600 for couples in 2021) gave a taste of this benefit, with roughly 48 million taxpayers taking advantage. But now, the permanent expansion in 2026 not only increases the deduction limits but also signals a broader shift toward incentivizing philanthropy among everyday Americans.
Here’s a strategic insight that’s not getting enough attention: If you’re planning year-end donations and you don’t itemize, consider delaying your gift until 2026. Certified Financial Planner Edward Jastrem calls it a “no-brainer” to make donations in January 2026 to capture this new deduction. This timing could enhance your tax efficiency without changing your overall giving budget. However, always weigh this against your personal cash flow needs and philanthropic goals.
From an advisory perspective, this development demands proactive client education. Many taxpayers won’t automatically know about this change or how to document their gifts properly. The IRS requires a “contemporaneous written acknowledgement” (CWA) for donations of $250 or more—this means a receipt or letter from the charity detailing the donation amount, date, and organization name. Without this, the deduction could be disallowed upon audit. Advisors must emphasize record-keeping discipline to clients to safeguard these benefits.
Looking ahead, this policy tweak could spur a rise in small to mid-sized charitable donations, particularly among middle-income earners who previously saw no tax benefit from giving. For investors, this trend may increase support for community foundations and donor-advised funds (DAFs), which offer additional tax planning flexibility. According to a recent report by the National Philanthropic Trust, DAF contributions grew by 15% in 2023 alone, signaling growing interest in tax-smart giving vehicles.
What should investors and advisors do differently now?
- Revisit Charitable Giving Plans: Evaluate whether clients who don’t itemize should shift some giving to 2026 to capture the new deduction.
- Enhance Record-Keeping Protocols: Educate clients on the importance of obtaining CWAs and maintaining detailed donation records.
- Explore Donor-Advised Funds: For those looking to maximize giving flexibility and tax efficiency, DAFs remain a powerful tool.
- Monitor Legislative Updates: While the bill is set for 2026, tax laws can evolve. Stay informed to adjust strategies accordingly.
In summary, this expanded charitable deduction is more than a tax break—it’s a strategic lever for investors and advisors aiming to optimize philanthropy and tax efficiency. As the landscape shifts, those who anticipate and adapt will unlock new value for themselves and their clients.
Forbes and the IRS provide solid foundational data, but Extreme Investor Network’s edge is in connecting these dots to actionable strategies that go beyond the headlines. Stay tuned as we track how this policy unfolds and what it means for your portfolio and philanthropic impact.
Source: Trump’s ‘big beautiful bill’ adds new tax deduction for charitable gifts