Inside United Way’s Charitable Edge Series
Navigating the changes in tax laws for charitable giving in 2026 is critical for donors and organizations. United Way of Greater St. Louis has launched a quarterly education series called The Charitable Edge Series to help with this. The first session featured Alan W. Dierker from Schmersahl Treloar, Co., who explained what’s changing in tax laws and how it impacts charitable donations.
Key Points About Changes in Charitable Giving:
Past Tax Laws:
The 2017 Tax Cuts and Jobs Act (TCJA) made it necessary for taxpayers to itemize deductions to benefit from charitable donations. Key limits included:
- 60% of adjusted gross income (AGI) for cash donations to public charities.
- 30% of AGI for gifts of capital gain property.
- 10% limit for C-corporations.
New Changes in 2026:
Starting January 1, 2026, the One Big Beautiful Bill Act introduces several updates:
- Standard Deduction: Individuals can deduct up to $1,000 for charitable gifts, or $2,000 for married couples, even without itemizing.
- Revised AGI Limits:
- 50% for cash donations to public charities.
- 30% for gifts of capital gain property.
- 20% for donations to non-public charities.
- New Deduction Requirement: Charitable contributions must exceed 0.5% of AGI before deductions apply.
- Corporate Deductions: Corporations can deduct contributions between 1% and 10% of taxable income, with unused amounts carried forward.
- Strategies for Charitable Giving:
- Qualified Charitable Distributions (QCDs): Those aged 70½ or older can give directly from their IRA, with a limit of $111,000 in 2026.
- Donating Appreciated Securities: This allows donors to avoid capital gains tax while supporting charities.
- Bunching Contributions: Donors can maximize deductions by making larger gifts in a single year, often using donor advised funds (DAFs).
It’s vital for individuals and corporations to consult their tax advisers for specific guidance on these topics, as personal situations and tax implications can vary significantly.
Looking Ahead: The Next Charitable Edge Session
Stay tuned for the details on the next session of the series, where we’ll explore family philanthropy and how to engage the next generation.
As tax laws continue to evolve, understanding charitable giving strategies can help donors align financial planning with meaningful community impact.
Note: This material is for informational purposes only. United Way does not provide tax, legal, or accounting advice. Please consult a professional advisor before engaging in any transaction.
TAKE ACTION NOW:
- Learn more about Donor Advised Funds.
- Learn about Ways to Give.
