The “One Big Beautiful Bill Act” (OBBBA), signed into law on July 4, 2025, will reshape charitable giving incentives beginning in 2026. What do these changes mean for you?
For taxpayers who take the standard deduction: Your generosity may soon go further. Starting in 2026, the new law will allow you to deduct up to $1,000 in qualifying charitable gifts for single taxpayers ($2,000 for married filing jointly) — even if you take the standard deduction.
Recommended actions for donors who take the standard deduction:
• Make a Roll Call pledge now to pay in 2026, or
• Set up a monthly recurring gift. An $84/month gift reaches the full $1,000 limit.
For taxpayers who itemize: You may be affected by new limits on charitable deductions that begin in 2026. The OBBBA introduces two key changes that will reduce the tax advantage of charitable gifts: 1) a 35 percent cap on the total value of itemized deductions (including charitable gifts), and 2) a 0.5 percent Adjusted Gross Income floor, allowing deductions only for giving that exceeds that threshold. To maximize your tax benefit, consider accelerating your 2025 giving while current rules still apply.
Recommended actions for donors who itemize:
• Make your 2025-26 Roll Call gift before December 31,
• Consider paying off capital and endowment pledges early, or
• Contribute to your Donor Advised Fund before December 31 to secure your deduction under 2025’s favorable rules and maintain flexibility to support EHS and your other philanthropic priorities later.
Other tax-savvy approaches to charitable giving include making gifts of appreciated stocks or securities or making an IRA charitable distribution.
• Gift of Securities (Stock Transfer): When you donate appreciated stocks or securities, you avoid capital gains taxes and can deduct the full market value of your gift. It’s a win-win for you and the School!
• IRA Charitable Distribution: If you have an individual retirement account (IRA) and are over the required minimum distribution age (73), consider a Qualified Charitable Distribution (QCD) to Episcopal. A QCD lets you transfer up to $100,000 per year directly from your IRA to a qualified charity without having to include the distribution in taxable income. It also counts toward your Required Minimum Distribution. If you’re choosing not to itemize because of the standard deduction, a QCD is especially attractive. And for those who itemize, it sidesteps the impacts of the 0.5% Adjusted Gross Income floor and the 35% cap on total value of itemized deductions.
Want to get started? Episcopal’s EIN number is 54-0506326, and you can find stock transfer instructions and other ways to give on our website.
If you have any questions, please reach out to Margaret Waters ’06. Every gift makes a difference for Episcopal’s students, teachers, and programs.
