US Insights

With the current, more generous deduction rules still in place for 2025, now is an ideal time to review your giving strategy and consider accelerating planned donations before the year-end.

Find out what’s changing, why this matters, and how to take action.

What’s Changing in 2026?

From 1 January 2026, several key changes will affect how US taxpayers claim deductions for charitable contributions:

• New 0.5% AGI floor for itemised deductions
  Charitable deductions will only be allowed to the extent they exceed 0.5% of Adjusted Gross Income (AGI).
  Example: If your 2026 AGI is $600,000, the first $3,000 of donations will not be deductible.
• Limited deduction for standard deduction users
  Taxpayers who do not itemise will be allowed a flat deduction of up to $2,000 for cash donations to qualifying charities.
  This excludes contributions to donor-advised funds and non-cash gifts.
• Cap on the value of deductions for high-income taxpayers
  For taxpayers in the 37% income tax bracket, the value of charitable deductions will be capped at 35%, reducing the effective tax benefit of larger donations.
  These measures are intended to simplify the system, but for many high-income individuals and families, they will significantly reduce the tax value of charitable giving from 2026 onward.

Why Take Action?

If you currently itemise deductions and would be affected by either the 0.5% AGI floor or the 35% cap on deductions in 2026, you may wish to accelerate your charitable donations into 2025.

By doing so, you can:

• Secure full deductibility under the current 2025 rules
• Maximise the tax efficiency of planned charitable gifts
• Structure future donations to align with the new 2026 framework

How to Take Action

1. Bring forward planned donations

Make any significant charitable gifts before 31 December 2025 to take full advantage of the current, more favourable deduction rules.

2. Consider structured giving

Evaluate the use of donor-advised funds (DAFs) or charitable trusts to “bunch” multiple years’ worth of giving into 2025. This can help secure larger deductions now while maintaining flexibility to distribute funds over time.

3. Coordinate with your advisers

Work with your tax and financial advisers to model the impact of the upcoming 2026 changes and determine the optimal timing and structure of donations.

Next Steps

With the charitable deduction landscape changing from 2026, 2025 represents a unique window of opportunity to maximise the tax efficiency of your giving. Whether you’re planning significant charitable contributions or wish to establish a longer-term philanthropic structure, now is the time to review your approach.

Blick Rothenberg’s US/UK Private Client team advises individuals and families on cross-border income tax, estate, and charitable giving strategies. To discuss how the 2026 charitable deduction changes may affect your giving plans, please contact your usual adviser or reach out to our team.