15d • General discussion
Confusion about Charitable Contributions
I've gotten this question a couple times from clients about whether charity counts outside of the itemized/standard deduction.
The answer is that the One Big Beautiful Bill Act (OB3) created a new charitable deduction above the line, similar to how it was temporarily during covid.
Starting in tax year 2026 (filed in 2027 and onwards), married-filing-joint filers will be able to claim up to $2k in charitable deductions in addition to their standard deduction. All other filers will be able to claim up to $1k in additional charitable deductions.
Note: Donor-advised-fund (DAF) and foundation contributions are specifically excluded from this. It has to be a public charity.
Typically that will not be an issue since if you are doing DAF or foundation contributions those would be large enough to itemize.
Example:
Married-filing-joint
Adjusted gross income: $150k
Standard deduction: $32,200
Charitable contribution: $1,650
Taxable income = 150,000 - 32,200 - 1,650 = $116,150
So the charitable contribution that normally would have been "lost" in the standard deduction ends up being deducted anyways and reduces the taxable income.
0
0 comments
Confusion about Charitable Contributions
skool.com/tax-strategy-network
Discover and implement proven tax strategies used by smart owners to legally reduce taxes and keep more of what you earn
Leaderboard (30-day)
1
+1
2
+1
Powered by