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Charitable and Itemized Deduction Changes Under the One Big Beautiful Bill Act

In July 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), bringing the largest tax changes in years. Many of these provisions take effect in 2026 and will directly affect how households approach charitable giving and itemized deductions. For families who value philanthropy or rely on deductions to manage taxable income, understanding these changes now is critical to avoid surprises later.

Charitable Deduction Changes

For taxpayers who itemize, a new 0.5% of Adjusted Gross Income (AGI) floor will apply. This means that the first portion of charitable gifts, equal to 0.5% of your AGI, will not be deductible. For example, if your AGI is $200,000 (regardless of filing status), the first $1,000 of donations will not count toward a deduction. This rule could affect smaller annual donors who give regularly but may not exceed the threshold in a given year.

In addition, taxpayers in the top 37% tax bracket will see their charitable deduction benefit capped at 35%, effectively reducing the value of giving for high-income households. However, there is a silver lining: the ability to deduct cash gifts to public charities up to 60% of AGI — previously a temporary rule — will become permanent, allowing generous donors to continue making significant contributions within one tax year.

For those who take the standard deduction, a new universal charitable deduction will apply. Single filers will be able to deduct up to $1,000 in cash donations, while married couples filing jointly can deduct up to $2,000. It’s important to note that this deduction only applies to gifts made directly to qualified operating charities. Contributions to donor-advised funds or private non-operating foundations will not qualify.

Other Itemized Deduction Updates

The law also makes changes to other popular deductions. Between 2025 and 2029, the cap on the state and local tax (SALT) deduction will temporarily increase from $10,000 to $40,000 for most households earning under $500,000 in AGI. This adjustment will provide relief for families in high-tax states who previously had limited ability to deduct property, income, and local taxes.

Meanwhile, the medical expense deduction remains aligned with prior law, with qualifying expenses deductible once they exceed 7.5% of AGI. While this provision is not new under OBBBA, it continues to be an important part of tax planning for families facing significant healthcare costs.

 

Planning Considerations for Donors

These changes create both challenges and opportunities for individuals who want to make charitable giving part of their financial plan. One strategy for high-income donors is to accelerate gifts into 2025 before the 35% cap takes effect. Making larger contributions now may lock in more favorable tax treatment while also supporting charities in advance of the new rules.

Another approach is to consider “bunching” donations. Instead of spreading smaller gifts across several years, donors may choose to consolidate several years of giving into one year. This allows them to surpass the new 0.5% AGI floor and take advantage of itemizing deductions. In off-years, when they claim the standard deduction, they can still benefit from the new universal above-the-line deduction.

Donor-advised funds (DAFs) remain a flexible tool in this environment. By making a large contribution to a DAF in one tax year, a donor receives the deduction immediately while maintaining the ability to distribute grants to charities over time. This approach can work well alongside a bunching strategy.

 

The Bottom Line

The One Big Beautiful Bill Act changes how both large and modest gifts are treated under the tax code. While the new rules may limit deductions for some taxpayers, they also introduce opportunities for planning, especially for families who are proactive. Charitable giving remains a meaningful way to align financial planning with personal values, but the timing and structure of those gifts will now matter more than ever.

By reviewing your giving strategy before these changes take effect in 2026, you can position yourself to maximize tax benefits while continuing to support the causes you care about most.

If you’d like to discuss how these new rules affect your personal plan, contact our team. We’ll help you evaluate your charitable options and integrate them into your broader financial strategy.

 

Golf Tip of the Week:

Regain Distance with Age-Smart Swings

Losing a few yards off the tee doesn’t have to be permanent. PGA pro Padraig Harrington shared with Golf Digest a few smart drills that can help senior golfers add back some speed—without overhauling their swing.

  1. Grip in the fingers, not the palms.
    This frees up your wrists for a faster hinge and release through impact, helping you generate more clubhead speed even if flexibility has dipped.
  2. Step into your swing.
    Add a small step or shift toward your lead foot as you start down. This uses ground force and rhythm instead of brute strength, which helps restore lost power.
  3. Stay stable up top.
    Keep your chest and lead side steady while your hips drive the downswing. That stability channels energy efficiently into the ball.
  4. Warm up for speed.
    Before teeing off, make a few light, quick practice swings and loosen your wrists and hips. A “speed-ready” body performs better than a cold one.

 

Why it works:
These moves focus on leverage and motion instead of muscle—perfect for players looking to stay long, loose, and efficient well into their senior years.

 

Golf tip adapted from Golf Digest. Read the full article here: “Add Yards and Take Years Off Your Drives”

 

Recipe Tip of the Week:

Dill Pickle Dip

Ingredients:

  • 1 cup sour cream
  • ½ cup mayonnaise
  • 1 cup chopped dill pickles (~5 spears)
  • 2 Tbsp pickle juice
  • 1 tsp dried dill (or 1 Tbsp fresh dill)
  • ½ tsp garlic powder
  • ½ tsp onion powder
  • ⅛ tsp ground black pepper

 

Instructions:

  1. In a mixing bowl, stir together the sour cream, mayonnaise, chopped pickles, pickle juice, dill, garlic powder, onion powder, and black pepper.
  2. Cover and refrigerate for about 1 hour to let the flavors meld.
  3. Serve chilled with potato chips, crackers, pita chips, or fresh veggie sticks (carrots, celery, bell pepper)—whatever you like for dipping.
  4. Leftovers can be stored in an airtight container in the fridge for 3-4 days.

 

Recipe tip adapted from Flavorful Eats. Read the full article here: Dill Pickle Dip

 

Travel Tip of the Week:

Embrace “Off-Peak” Timing for Winter Getaways

If you’re heading out during the chilly months, consider travelling just before or after the peak holiday rush—you’ll often find better deals, fewer crowds, and more relaxed experiences. According to Travel + Leisure, winter trips don’t have to mean frigid stress; instead, by choosing timing wisely you unlock lower prices, less competition for rooms and excursions, and a more leisurely pace of travel.

 

Why it works:

  • Hotels and flights tend to be pricier and fully booked during major holidays. Travelling just outside those peak windows often means significant savings.
  • Fewer tourists means easier access to popular attractions, more relaxed dining reservations, and a generally calmer travel vibe.
  • Winter brings unique experiences (snowy landscapes, cozy lodges, festive ambiance) but you don’t need to fight crowds to enjoy them—just pick the right dates.

 

How to use it this week:

  • Run a quick check on your next winter-trip idea: compare dates during peak vs just-off-peak and see what the difference is on cost.
  • Consider early January or late February instead of December if you’re flexible.
  • When booking hotels or rentals, look for mid-week stays rather than weekends for best value and atmosphere.

 

Travel tip adapted from Travel + Leisure.  Read the full article here: Embrace the Chill: Winter Travel Inspiration”

Copyright © 2025. BCA Private Wealth. All rights reserved.

 

Sources

 

Our mailing address is: 

BCA Private Wealth
15 Halton Green Way
Greenville, SC 29607

 

Disclosure:

BCA is a Securities and Exchange Commission registered investment advisor. The advisory services of BCA Private Wealth are not made available in any jurisdiction in which BCA Private Wealth is not registered or is otherwise exempt from registration.

Please review BCA Private Wealth Disclosure Brochure for a complete explanation of fees. Investing involves risks. Investments are not guaranteed and may lose value.

This material is prepared by BCA Private Wealth for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.

No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.

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