(This article originally appeared in the November 2025 issue of Military Officer, a magazine available to all MOAA Premium and Life members who can log in to access our digital version and archive. Basic members can save on a membership upgrade and access the magazine.)

Recent changes to tax laws introduced by the One Big Beautiful Bill Act might affect the way taxpayers contribute to their favorite charities.

Ever since the Tax Cuts and Jobs Act increased the standard deduction in 2017, only about 10% of households have itemized deductions, making them ineligible for charitable-giving tax deductions. Starting in the 2026 tax year, however, there will be a reinstated deduction that allows those not using itemized deductions to instead deduct cash donations made to charity.

Single filers will be able to deduct up to $1,000 of contributions, and married couples filing jointly can deduct up to $2,000.

The new legislation caps the tax benefits of itemized charitable deductions at 35%, even for those in the 37% marginal tax bracket.

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Also starting in 2026, those using itemized deductions who make charitable contributions will only be able to claim a tax deduction to the extent that it exceeds 0.5% of their adjusted gross income (AGI).

Paul Allen, a MOAA member, certified financial planner, and enrolled agent at PIM Tax Services, said these new provisions might “reshape how charitable giving impacts your taxes.”

Benefits of QCD 

A qualified charitable distribution (QCD) is a direct transfer of funds from the custodian of an individual retirement account to a qualified charity. There are two benefits to this: A QCD can count as one’s annual required minimum distribution; and it is excluded from taxable income.

“QCDs are looking better than ever,” Allen said. “The new 0.5% AGI threshold for itemizing slightly increases the tax efficiency of giving through a QCD. As an above-the-line deduction, the QCD is not subject to the 0.5% AGI floor, so 100% of your QCD gift will reduce your income for tax purposes.”

But keep two caveats in mind: You must be at least age 70½ to make a QCD; and since the amount is not taxed, you can’t also claim the QCD as a charitable tax deduction.

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Alternative Routes

High earners could consider accelerating their charitable giving in the 2025 tax year before the new itemized deduction caps begin in 2026.

Starting in 2026, donors could consolidate several years’ worth of planned donations into one year in order to clear the new 0.5% AGI floor.

Donors can still avoid capital gains taxes by gifting appreciated stocks and other assets that they have held for longer than a year.

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Seek Out a Professional

With the passage of new legislation, there are many unknowns.

“Given the significant changes to 2025 tax laws and the IRS’ reduced manpower and budget, we may not receive much official guidance for these 2026 provisions until it is nearly time to file our 2026 tax returns,” Allen said.

He said taxpayers should consult a professional to ensure they’re maximizing the benefits of supporting their favorite causes.