For most of the families we serve across Kentucky, giving was never exclusively about the tax return. It’s about the church that showed up when your family needed it, the scholarship that carries your parents’ name, or the local organization that helped make your community what it is. The generosity comes first. But thoughtful charitable planning strategies can help every dollar you give go further. In 2026, the rules shaping charitable deductions look meaningfully different than they did a year ago. Understanding those changes can be the difference between a gift that’s generous and one that’s both generous and efficient.
What Changed for Charitable Deductions This Year?
The One Big Beautiful Bill Act (OBBBA), signed in July 2025, reshaped charitable giving in a few important ways, and many of those changes took effect January 1, 2026.
First, the encouraging news: taxpayers who don’t itemize can now deduct up to $1,000 in cash gifts to qualified charities, or $2,000 for married couples filing jointly. For the many households that take the standard deduction, this restores a modest tax benefit for everyday giving.
Second, itemizers now face a floor. Charitable gifts are deductible only to the extent they exceed 0.5% of adjusted gross income (AGI). A couple with $400,000 in AGI, for instance, receives no deduction on their first $2,000 of giving.
Third, taxpayers in the top 37% bracket now see the value of itemized deductions capped at 35 cents on the dollar.
None of this changes whether you should give, but it does change how and when you give, which is exactly what proactive tax planning is meant to sort out.
How Can Retirees Give Directly From an IRA?
If you’re 70½ or older, a qualified charitable distribution (QCD) is often the single most efficient way to give. You can direct up to $111,000 per year ($222,000 for married couples who each own an IRA) from a traditional IRA straight to a qualified charity.
The advantage goes beyond a deduction. QCD dollars never appear in your income at all. That lower AGI can ripple outward in helpful ways: less of your Social Security may be taxable, and you may stay below the thresholds that trigger Medicare IRMAA surcharges. Once required minimum distributions begin at 73, a QCD can satisfy some or all of your RMD. It’s one of several levers we look at when building a retirement income strategy around taxes rather than in spite of them.
A few mechanics matter. Funds must move directly from your IRA custodian to the charity. Employer plans like 401(k)s and 403(b)s aren’t eligible, though a rollover to an IRA can solve that. And QCDs can’t be directed to a donor-advised fund (DAF) or private foundation.
Why Do Donor-Advised Funds Still Make Sense?
Donor-advised funds remain one of the most flexible tools available, and the new AGI floor arguably makes them more useful, not less.
The strategy is bunching. Rather than giving $10,000 a year for five years, where the floor erodes each year’s deduction and the gifts likely never clear the standard deduction at all, you contribute $50,000 to a DAF in a single high-income year, clear the threshold decisively, and itemize. In the following years, you take the standard deduction. Meanwhile, your grants to the charities you support continue on whatever schedule you choose. The tax event and the giving are decoupled.
Should You Give Assets Instead of Cash?
Writing a check is simple, but it’s rarely the most efficient option. When you donate publicly traded securities you’ve held more than a year, you generally deduct the full fair market value and avoid the capital gains tax you’d owe on a sale. Two benefits from one gift.
Real estate and closely held business interests can work similarly, though they require qualified appraisals and a charity or DAF equipped to accept them. For business owners anticipating a sale, timing can determine whether the strategy works at all. Once a transaction is far enough along, the IRS may treat the gain as yours regardless of who holds the shares at closing. That makes it a conversation to start early, with your CPA and attorney at the table.
How Do You Pass Down More Than Money?
For multigenerational families, giving is often where values become visible. A DAF with named successor advisors lets children and grandchildren carry the work forward. Some families formalize this further with a private foundation and a stated mission.
The mechanics matter less than the practice. Families who sit down together, review requests, and make decisions as a group tend to raise heirs who understand what the money is for.
If you’d like to review your current giving or explore how these strategies fit into your broader wealth plan, our team is here to help you move forward with clarity and confidence. Get in touch with us today.
