Charitable Deduction Rules Are Changing: What You Need to Know

As we close out 2025, the board and team at LHCC want to say a heartfelt thank you. Your generosity has been a true blessing, making a real difference for neighbors across the Charlotte community this year.

If you haven’t yet made your year-end gift, there’s still time! We invite you to join us in this important work—there’s never been a better moment to impact lives in meaningful ways.

Looking Ahead: What’s Changing in 2026?

Beginning in 2026, the One Big Beautiful Bill Act (OBBBA) introduces new rules for charitable deductions. Here’s what you need to know:

  • New “Deduction Floor” for Itemizers
    If you itemize deductions, only gifts exceeding 0.5% of your Adjusted Gross Income (AGI) will qualify.
    Example: If your AGI is $100,000, the first $500 of giving won’t count toward a deduction. If you give $1,500, your deductible amount is $1,000.

  • Cap on Itemized Deductions for Higher-Income Taxpayers
    A new 35% cap on total itemized deductions may reduce tax savings for larger gifts.

  • New Deduction for Non-Itemizers
    If you take the standard deduction, you’ll now be able to deduct up to $1,000 (or $2,000 for couples) for cash gifts to public charities.

Why Give Before Year-End?

Charitable gifts made in 2025 are still fully deductible under current rules if you itemize. This means you can maximize your tax benefit—especially if you aggregate contributions or use a donor-advised fund.

Helpful Examples

  • Transformational Gift
    AGI: $400,000 | Gift: $25,000

    • 2025: Entire gift deductible → approx. $9,000 tax savings

    • 2026: $2,000 not deductible → savings drop to about $7,000
      Tip: Consider making larger gifts in 2025 for maximum benefit.

  • Annual Gift
    AGI: $200,000 | Gift: $1,000

    • 2025: Fully deductible

    • 2026: First $1,000 won’t qualify
      Tip: Aggregate smaller gifts into one year to exceed the new threshold.

Good News for Standard Deduction Filers

Starting in 2026, you can deduct up to $1,000 (or $2,000 per couple) for gifts to public charities—a great incentive for those who don’t itemize.

How We Can Help

If you’d like to discuss your year-end giving or explore the best options, we’re here for you. Contact Brent Morris, Executive Director, at info@lhcclt.org.

LHCC also accepts stock gifts through National Christian Foundation, which can help you avoid capital gains tax or qualify as RMD gifts.

Next Steps:

  • Consult your financial or tax advisor

  • Review your giving plans for 2025 and 2026

  • Consider whether a 2025 gift makes sense for you

We’re truly grateful for your partnership in serving our LHCC neighbors!