Year-End Charitable Giving in 2026: How the New Tax Rules Change the Math

The rules for deducting charitable gifts changed on January 1. If you give every December, this is the first year it matters.

What Changed This Year

The One Big Beautiful Bill Act, signed in July 2025, made several changes to charitable deductions that took effect with the 2026 tax year. The year-end gifts you make this December are the first ones those rules apply to.

• A new deduction for people who don't itemize. If you take the standard deduction, you can now deduct up to $1,000 of cash gifts to qualified charities ($2,000 for married couples filing jointly). Gifts to donor-advised funds and private foundations do not count toward it.
• A floor for itemizers. If you itemize, your charitable deduction is now reduced by 0.5% of your adjusted gross income (AGI). With an AGI of $200,000, the first $1,000 you give in a year produces no deduction.
• A cap for the top bracket. Taxpayers in the 37% bracket now get a charitable deduction worth a maximum of 35 cents per dollar given.
• A higher SALT cap. The state and local tax deduction limit rose to $40,000 (subject to income limits). In the Katy and Fulshear area, where property taxes and MUD rates run high, more households may find that itemizing makes sense again.

Why Timing Now Matters More

The floor applies every year you itemize. Giving the same amount every year means paying the floor every year. Concentrating two or more years of giving into one tax year, often called "bunching," means paying it once.

A simplified example: a couple with $100,000 of AGI who itemizes and gives $5,000 each year loses $500 of deduction to the floor each year. If they give $10,000 every other year instead, they lose $500 once, and they may take the standard deduction in the off year. The total gift to charity is the same; the deductible portion is larger.

A donor-advised fund can make bunching practical. You contribute several years of giving in one year, take the deduction then (if you itemize), and recommend grants to charities over the following years.

Qualified Charitable Distributions (QCDs)

If you are 70½ or older and own a traditional IRA, a QCD may be the most tax-efficient way to give. A QCD is a transfer directly from your IRA to a qualified charity, and for 2026 the limit is $111,000 per person.

Because a QCD is excluded from income instead of being deducted, the new floor and the 35% cap do not apply to it. A QCD can also count toward your required minimum distribution, and because it lowers your AGI, it may help keep you below a Medicare premium surcharge tier. (See our article on IRMAA.)

A few rules to know:

• The money must go directly from the IRA custodian to the charity. A distribution paid to you first and then donated is not a QCD.
• QCDs cannot go to donor-advised funds or private foundations.
• QCDs come from IRAs, not from a 401(k) or other employer plan.

Giving Appreciated Stock

For many energy-industry families, the most valuable asset to give is not cash. Donating shares held more than a year that have grown in value can let you deduct the market value (subject to AGI limits) while avoiding the capital gains tax you would owe if you sold. This can also be one way to reduce a concentrated position in a single company's stock.

Year-End Deadlines

To count for 2026, a gift generally has to be completed by December 31.

• Checks should be mailed (postmarked) by December 31. Credit card gifts count when charged.
• Stock transfers can take several business days. Starting in early December gives you room.
• QCDs must leave your IRA by December 31. Custodians often set earlier internal cutoffs, so check with yours.
• For any single gift of $250 or more, you need a written acknowledgment from the charity to claim a deduction.

The Bottom Line

The new rules reward planning more than they used to. Before you write checks this December, it is worth deciding whether you will itemize this year, whether bunching makes sense, and whether a QCD or a gift of stock fits better than cash. If you would like help working through those questions alongside your tax picture, our team can help.

Investment advisory services offered through CreativeOne Wealth, LLC, a Registered Investment Adviser. CreativeOne Wealth, LLC and Luca Wealth Management are unaffiliated entities. This material is for informational purposes only and does not constitute investment, tax, or legal advice. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Please consult with a qualified professional before making any financial decisions.