Oct. 30, 2025- Pyle Financial Services Team
At Pyle Financial Services, one of our favorite parts of the planning process is helping families LoveMore — giving intentionally and efficiently to the people and causes that matter most. Charitable giving is not just about generosity; it’s also about alignment — aligning your values, your tax strategy, and your impact.
As we continue to guide clients through our KeepMore Roadmap, the LoveMore stage focuses on giving strategies that allow you to make a meaningful difference while still keeping more of what you’ve worked hard to build. And beginning in 2026, charitable giving will see some notable tax changes that are worth understanding today.
What’s Changing for Charitable Giving in 2026
New legislation introduces several updates that will affect how charitable deductions work, starting with two big ones.
1. A new 0.5% “floor” on charitable deductions.
Beginning in 2026, itemizing taxpayers will only be able to deduct charitable contributions that exceed 0.5% of their adjusted gross income (AGI). In other words, the first half of one percent of your giving will no longer qualify for a deduction.
Example: If your AGI is $1,000,000, your first $5,000 of charitable giving will not be deductible. This change primarily impacts moderate and high-income donors who give regularly but not at very high percentages of income.
2. A new cap on the value of deductions for higher earners.
The maximum tax benefit from charitable (and other itemized) deductions will now be limited to a 35% marginal rate, even if you’re in a higher tax bracket. So, if you’re in the 37% bracket, each deductible dollar will only reduce your tax bill by 35 cents.
Together, these two rules slightly reduce the tax efficiency of charitable giving — especially for those who itemize and give annually.
Other related updates include:
- A new deduction for non-itemizers (up to $1,000 single / $2,000 joint for cash gifts directly to qualified public charities).
- A permanent 60% of AGI limit for cash gifts to public charities.
- A 1% “floor” for corporate gifts, meaning businesses must give above that amount before deductions apply.
What This Means for You
These shifts don’t change the heart behind charitable giving — but they do affect the timing and structure of your strategy.
If you’re already giving annually, your first few thousand dollars of donations may no longer provide a tax deduction in 2026. That makes it more important to coordinate giving as part of a comprehensive financial plan rather than viewing it as a year-end gesture.
For high-income families, the new cap on deduction value may also reduce the marginal tax savings of large gifts — though philanthropy still remains one of the most powerful ways to align wealth with purpose.
Our LoveMore Planning in Action
- Strategic Timing: Reviewing opportunities to accelerate charitable contributions into 2025, before the new 0.5% floor applies.
- Gift Bunching: For clients who give smaller amounts annually, we may recommend “bunching” multiple years’ worth of donations into one tax year to overcome the 0.5% threshold.
- Donor-Advised Funds (DAFs): DAFs continue to be a powerful tool for flexibility — allowing you to front-load contributions (and the deduction) before 2026.
- Charitable Stacking Strategies: Coordinating gifting with other deductions such as retirement plan contributions or Roth conversions to maintain itemization and offset taxable income efficiently.
- Corporate Giving Adjustments: Reviewing charitable budgets to ensure giving remains deductible under the new 1% rule.
A Practical Example
Let’s say a couple with an AGI of $800,000 donates $10,000 each year to their favorite charities:
• Under current law, the full $10,000 is deductible.
• Starting in 2026, the first $4,000 (0.5% × $800,000) will not qualify. Only $6,000 will count toward a deduction, and the value of that deduction will be capped at 35%.
That makes their effective tax savings smaller, but with proper planning, they can adjust — by either bunching gifts into fewer years, contributing appreciated stock, or establishing a donor-advised fund now to secure today’s more favorable rules.
Plan Ahead to KeepMore and LoveMore
Charitable giving has always been about purpose — not paperwork. But as tax law evolves, it’s crucial to keep both in balance. The new 2026 rules don’t diminish the impact of your generosity; they simply underscore the importance of planning before you give.
At Pyle Financial Services, we’re passionate about helping clients design giving strategies that allow them to KeepMore, LiveMore, LoveMore, and LeaveMore — turning generosity into a lasting part of their legacy.
If you’d like to review your charitable giving strategy before these changes take effect, we’d love to walk through the LoveMore process with you and explore how to align your giving goals with your broader wealth plan.