The recently passed One Big Beautiful Bill Act (OBBBA) is changing the landscape of charitable giving. While new rules create challenges, they also open doors for thoughtful planning. That’s why 2025 is an especially important year to connect with your attorney, CPA, and financial advisor. At Portage Foundation, we are ready to work alongside you and your advisors to help design strategies that reflect your goals while also navigating the law’s changes.
Is “Bunching” Right for You?
In 2025, the standard deduction rises to $15,750 for single filers and $31,500 for married couples filing jointly. Seniors age 65 or older can claim an additional $6,000 deduction, though this begins phasing out once MAGI exceeds $75,000. These increases mean fewer taxpayers will itemize, which could affect charitable giving strategies.
One approach is “bunching”—making several years’ worth of charitable contributions in 2025, perhaps using a donor-advised fund at Portage Foundation. This allows you to exceed the higher deduction threshold now, while still distributing gifts to charities in future years. Timing matters: in 2026, deductions for charitable giving will only apply to amounts above 0.5% of AGI, and even those in the top 37% tax bracket will be limited to deducting at 35%. For many donors, that makes 2025 the prime year to front-load contributions.
A New Deduction for Non-Itemizers
Starting in 2026, non-itemizers will be able to deduct cash contributions up to $1,000 (single) or $2,000 (married filing jointly). While this excludes donor-advised funds and non-cash gifts, it’s still good news for many, especially younger donors who don’t itemize. If you’re encouraging children or grandchildren to give, this provision can help them experience the tax benefits of charitable giving early on.
Reconsidering Qualified Charitable Distributions
For those age 70½ or older, Qualified Charitable Distributions (QCDs) remain a powerful tool. In 2025, individuals can give up to $108,000 annually directly from an IRA to eligible charities, avoiding taxable income entirely. Because the OBBBA raises the standard deduction, QCDs become even more valuable: they deliver tax benefits regardless of whether you itemize. QCDs can also count toward required minimum distributions (RMDs), lowering adjusted gross income, which may reduce taxes on Social Security benefits and Medicare surtaxes. And importantly, QCDs sidestep the new limits on itemized charitable deductions beginning in 2026.
The OBBBA changes how charitable giving fits into tax planning, but it doesn’t change the impact you can make. If you’d like to explore your options, contact our offices at 330-470-8950 for a complimentary consultation with you and your advisors.
This article is not intended as legal, accounting, or financial planning advice.