Many people want to give more but aren’t sure how it will impact their taxes. The new One Big Beautiful Bill Act (OBBA) law is changing that — making it easier than ever to support the causes you care about while also getting a little extra back at tax time. Starting in 2026, taxpayers who take the standard deduction (and don’t itemize) can claim a special deduction for certain cash donations to public charities.
Here’s what this opportunity means for you.
A Simple Way to Give and Save
Starting in 2026, taxpayers can take a special deduction for cash donations to public charities, even if they don’t itemize their deductions.
This is important because it means more people can give and still benefit from a tax break.
Here’s how it works:
- Single filers can give up to $1,000 in cash directly to a qualified public charity and receive a tax deduction.
- Married couples filing jointly can give up to $2,000 and receive the same benefit.
- This deduction is available even if you take the standard deduction — so you can still claim your full standard deduction and potentially reduce your taxable income further with qualifying gifts.
Important Rules to Know
To make sure your donation qualifies for this deduction, here are a few key details to keep in mind:
- Your donation lowers the income you pay tax on; it is not a dollar‑for‑dollar tax credit.
- Donations must go directly to a public charity.
- Donations must be made in cash (including check or credit card) directly to qualifying 501(c)(3) public charities, such as many schools, churches, and community nonprofits.
- Gifts to donor‑advised funds, supporting organizations, or most private foundations do not qualify for this particular deduction.
- The dollar limits are annual and not indexed. Single filers can deduct up to $1,000 in qualifying cash gifts each year. Married couples filing jointly can deduct up to $2,000 each year. These limits are fixed and are not scheduled to increase automatically with inflation.
- If you already itemize, different rules apply: starting in 2026, only the portion of your charitable giving above 0.5% of your adjusted gross income is deductible, and high‑bracket taxpayers are subject to a cap on the overall benefit of itemized deductions.
- Only cash gifts count.
- You can’t use donated items, stocks, or property for this deduction — only money that’s given directly counts.
- OBBA opportunity applies to gifts made during the 2026 tax year.
Why It Matters
This new rule is designed to make giving easier for everyone, not just those who itemize deductions.
It’s a win-win:
- You can support causes you care about.
- You can see an extra benefit when you file your taxes.
Whether it’s helping your local food bank, supporting an animal shelter, or donating to a community program, this is your chance to make a real impact while keeping your financial goals on track.
How to Make the Most of It
If you’re thinking about how this might fit into your financial or charitable giving plan, now is a great time to start planning.
Our team can help you:
- Build a tax-smart giving strategy.
- Choose the right charities that align with your goals.
- Make sure your donations qualify for every available benefit.
Giving Back, Made Simple
With OBBA, generosity truly pays off — for your community and for you.
Let’s make 2026 the year we all give a little more and make a bigger difference together.
Speak to a Farther advisor about qualified charities, custom giving strategies, and more.
