January 7, 2026

The One Big Beautiful Bill Act (OBBBA) changes how charitable donations are treated for tax purposes. Here’s what affluent families and entrepreneurs need to know to optimize their giving in 2026 and beyond.

Charitable Giving After OBBBA: What High-Income Families and Business Owners Need to Know

Charitable giving has long been a cornerstone of values-driven financial planning—allowing individuals to support causes they care about while receiving valuable tax benefits. But with the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, the rules have changed.

For families focused on legacy planning and business owners looking to manage tax exposure, understanding the new landscape is critical. OBBBA introduces new limits, new opportunities, and fresh considerations that could impact both your philanthropic goals and tax strategy in 2026 and beyond.

A New Deduction for Non-Itemizers

For the first time in decades, taxpayers who take the standard deduction will be able to deduct a portion of their charitable contributions. Starting in 2026:

• Single filers can deduct up to $1,000
• Married couples filing jointly can deduct up to $2,000

This applies only to cash gifts to qualifying public charities, excluding donor-advised funds and private foundations. This change broadens access to tax-advantaged giving, especially for those who no longer itemize under the increased standard deduction.

An AGI Threshold for Itemizers

For those who do itemize, OBBBA introduces a new hurdle: charitable gifts are only deductible to the extent they exceed 0.5% of adjusted gross income (AGI).

For example, if your AGI is $500,000, only the amount of charitable donations over $2,500 will be deductible. This effectively reduces or eliminates the deduction for lower or moderate levels of annual giving.

High-net-worth individuals and business owners—who often itemize deductions—should work with advisors to time or group donations strategically to exceed this threshold.

New Cap on High-Income Donor Deductions

Another major shift: the tax value of charitable deductions for those in the top income bracket is now capped at 35%, rather than tracking their actual marginal tax rate (formerly 37%).

This means that every $1 donated offers slightly less in tax relief. While this may seem like a small adjustment, it has significant implications for larger, multi-year giving strategies often used in family foundations or philanthropic business ventures.

Carryforwards Still Apply—but with Limits

If your charitable contributions exceed the deduction limits in a given year, you can still carry forward unused deductions for up to five years. However, these future deductions will still be subject to the same AGI floor and tax benefit cap under OBBBA.

This puts even more emphasis on strategic planning to ensure charitable goals align with tax efficiency year-over-year.

What This Means for You

If you’re a business owner, planning for a liquidity event, or managing a multigenerational estate plan, here are practical next steps:

• Review your current charitable giving plan to see how the AGI floor and capped deductions affect your tax outlook.
• Explore giving strategies such as “bunching” donations in a single year to exceed thresholds.
• Reassess use of donor-advised funds, which no longer qualify for the new non-itemizer deduction.
• Coordinate with financial and estate planning professionals to integrate charitable giving into your broader legacy and tax strategy.

Looking Ahead

The OBBBA changes underscore a broader trend: charitable giving remains a powerful tool—but one that now demands more deliberate, tax-smart planning. Whether you’re seeking to make a difference in your community or manage generational wealth, these updates are a call to align your philanthropy with a well-informed financial strategy.

Ready to adjust your charitable strategy?

• Schedule a meeting with Omni 360 Advisors to align giving with your tax and investment plan.
• Or book a Legacy Planning Session with Omni Legacy Law to ensure your philanthropic goals support your long-term estate vision.