7 Things You Need to Know About the New Tax Law (Effective 2026)

Starting January 1, 2026, important changes to the tax code may affect your charitable giving to Zelie’s Home and other nonprofits. Here’s what you should know to make the most of your generosity:

1. Tax Benefit for Non-Itemizers
If you take the standard deduction, you can still deduct up to $1,000 (single) or $2,000 (married filing jointly) in cash donations to qualifying public charities—including Zelie’s Home. (Note: Gifts to donor-advised funds, private foundations, and non-cash gifts are excluded.)

2. New Floor for Itemizers
Starting in 2026, itemizers will only be able to deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI). For example, with an AGI of $100,000, the first $500 of donations would not be deductible. Consider maximizing your giving in 2025 before this threshold begins.

3. Reduced Deduction Rate for Top Earners
If you’re in the highest federal tax bracket, the value of your charitable deduction will decrease—from 37% to 35%. Giving before 2026 may preserve greater tax savings.

4. Income Tax Rates
Federal income tax rates remain at their current levels, but deduction rules are changing.

5. Standard Deduction for 2025
The 2025 standard deduction will be $15,750 for single filers and $31,500 for married couples filing jointly. Non-itemizers may also benefit from strategies like donating appreciated assets or making qualified charitable distributions (QCDs) from IRAs if age 70½ or older.

6. Cash Gift Deduction Limits
You can still deduct cash contributions to public charities up to 60% of your AGI. Combining cash and non-cash gifts (“blended giving”) can optimize your deductions.

7. Estate and Gift Tax Exemption
The federal estate and gift tax exemption is scheduled to increase to $15 million per individual (about $30 million for married couples). While most estates will not be impacted, focusing on current giving can maximize both your philanthropic and tax benefits.