The 2025 Tax Act: What It Means for Your Charitable Giving
- GC Wealth
- Dec 5, 2025
- 3 min read
The 2025 Tax Act reshapes how individuals can deduct charitable gifts, introducing new thresholds, timing considerations, and deduction limits that meaningfully impact anyone who donates consistently or in meaningful amounts. While charitable giving remains a powerful tool for tax-efficient generosity, how and when you give will matter more than ever.
The New 0.5% Adjusted Gross Income (AGI) Threshold
Beginning in 2026, itemizers must exceed a minimum donation level before receiving any deduction:
You must give at least 0.5% of your Adjusted Gross Income (AGI) before charitable deductions count.
If your AGI is $2M, the first $10,000 you give earns no deduction in 2026 and beyond.
Why It Matters
In 2025, every dollar still counts, making this year a strategic moment to maximize deductions before the new threshold arrives.
Strategy #1: Front-Load Gifts in 2025
Because the threshold doesn’t apply until 2026, donors concerned about the limit, particularly those who give modest amounts annually, should consider accelerating gifts into 2025.
Strategy #2: Bundle Gifts to Clear the Threshold
The new rules encourage making fewer, larger gifts rather than evenly spreading donations over many years.
A donor with $4M AGI gives $20K per year for five years (total $100K).
Threshold each year: $20K → No deduction in any year.
The same donor instead gives $100K in a single year and nothing in others.
Deduction allowed: $80K
Timing alone created a meaningful tax benefit.
Key takeaway: If your annual giving hovers near the new threshold, combining gifts into one year can dramatically improve deductibility.
Strategy #3: Avoid Donating Large Lump Sums in a Windfall Year
The 0.5% threshold rises sharply during high-income years, like selling a business or receiving a large bonus.
Normal years: AGI $900K, threshold $4,500
Windfall year: AGI $60M, threshold $300,000
Giving an extra $250K in the windfall year yields little to no deduction. Giving the same lump sum the next year could generate nearly the entire deduction.
New Cap on Itemized Deductions for High Earners
Beginning in 2026, those in the top marginal bracket will no longer receive a 37% tax benefit from itemized deductions, including charitable gifts.
Instead, the value drops to the equivalent of the 35% bracket, slightly reducing the federal tax savings of large gifts.
Non-Itemizers Get a Small Boost
Taxpayers who do not itemize may deduct $1,000 (single) or $2,000 (married filing jointly) in cash gifts, offering limited but welcome relief.
60% AGI Limit on Cash Gifts to Public Charities Made Permanent
The long-standing rule (60% AGI limit) for cash contributions to public charities is now permanent. Good news for those who make large cash donations.
Bottom Line
The 2025 Tax Act does not diminish the power of charitable giving; it simply changes the playbook. Smart timing and strategic structuring can significantly increase tax efficiency.
Before year-end, let’s review:
Whether you should front-load gifts in 2025
If bundling contributions will increase deductions
Whether this is the year not to give a large lump-sum gift
How your AGI, itemization status, and philanthropic goals align under the new rules
The decisions you make now will determine how much tax benefit your generosity delivers in the years ahead. Simply click reply to this email to get the conversation started about your particular situation.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.
Investment advice offered through Integrated Partners, a registered investment advisor, doing business as GC Wealth Advisors and its investment advisor representatives, Christopher Conner, Jason Rankin, Adam Tirapelle, and Kyle Trippel.
Grimbleby Coleman Advisors & Accountants and its individual partners are solicitors to Integrated Partners and are not registered investment advisor representatives. Solicitors do not provide investment advice and are compensated solely for their referral services. Click here for copies of the firm’s ADV, CRS, and solicitor disclosure statement.
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