Last year’s One Big Beautiful Bill Act (OBBBA) made several changes to the tax code that might affect the way taxpayers choose to give to charities.

These changes, and their impact on charitable giving, were the topic of a recent MOAA webinar which not only reviewed their impacts, but also explained how charitable giving can be done in tax-efficient ways.

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“It’s exciting to see when people want to be generous, and the military community can be very generous, but let’s also do it in a way that is smart and tax savvy,” said guest presenter Daniel Kopp, CFP, MQFP, founder of Wise Stewardship Financial Planning and a longtime MOAA member, during the live webinar. A recording is available for download for MOAA Premium and Life members, part of our extensive webinar archive.

New for 2026

There is a new, above-the-line charitable deduction of up to $1,000 for single taxpayers and $2,000 for those filing jointly. This means that even if you don’t itemize, you can still deduct your cash contributions to charities. Since only about 8% of individual income tax returns included itemized deductions in 2022 (the last year for which figures are readily available), this is good news for most Americans.

Also new for the 2026 tax year, those who itemize will now only be able to claim a tax deduction for charitable contributions that exceed 0.5% of their adjusted gross income (AGI).

For example, those with an AGI of $100,000 can only deduct contributions above $500.

Additionally, those in the top tax bracket will have a new cap on the amount of deductions they can take. Known as the “2/37 rule,” it limits the value of deductions of those in the 37% bracket to 35 cents for each dollar of deductions.

[RELATED: MOAA’s Military State Report Card and Tax Guide]

Cash Is Not Always King

Cash is not always the most tax-efficient way to give to charities, Kopp explained. Often, donating appreciated securities can be more beneficial.

Using a donor-advised fund (DAF), a charitable gifting account administered by a charity, is one way to streamline donating securities.

For those who aren’t typically able to itemize, Kopp also mentioned a strategy called “charitable lumping,” which involves making larger donations in a single tax year, most often to a DAF, and then distributing funds from the DAF to charities over time.

This strategy can be particularly effective for those looking to reduce their taxable income in one specific year.

Gifting From Your IRA

Qualified charitable distributions (QCDs) are a direct transfer of money from your IRA provider to a qualified charity. Not only can you contribute to a cause you care about, you can lower your taxable income, and it can count toward your required minimum distribution (RMD).

[MOAA CALCULATORS: Required Minimum Distribution (RMD)]

You don’t have to itemize your taxes to donate via a QCD, but you must be at least 70½ years old.

However, you can’t “double dip” with a QCD and the new above-the-line charitable tax deduction – you could make a direct transfer from your IRA to a qualified charity, but then you cannot count that same donation toward the $2,000 deduction.

Planned Giving

The webinar also included details on how planned giving can fit into an estate plan, provided by Jeff Angers, MOAA’s director of Development, Fundraising. Sometimes known as legacy giving, planned giving is the process of gifting charitable donations, such as cash, stocks, or real estate, upon death or through structured lifetime giving.

“Planned giving allows you to make a future gift — or a gift that provides income or tax benefits during your lifetime — while still meeting your personal, family, and philanthropic goals,” Angers said.

[MOAA CHARITIES: What You Should Know About Planned Giving]

While many people make bequests through a will or a trust, Charitable Gift Annuities (CGAs) and Charitable Remainder Trusts (CRTs) are more structured and can generate a potential income stream for donors.

Whatever your giving and gifting approach, Kopp emphasized that while coordinating your plan with your financial and tax preparation is important, you also have to have a desire to contribute to a cause you care about … and not let the “tax tail” wag the dog.