Just about everybody makes donations to charity. Rounding up on a fast-food purchase, giving old stuff to The Salvation Army (or other similar charities like Goodwill, FISH, Classy Seconds, etc.). Buying Girl Scout cookies. Dropping a few bucks at the request of various charities standing outside Wal-Mart. Etc. Americans are quite generous people. It used to be a given that they could also deduct that generosity on their tax return.
Way back in 2018, most folks lost the ability to deduct their charitable donations. It was known as the Tax Cuts and Jobs Act. In that bill, the standard deduction was raised so high, most folks didn’t need to itemize their deductions any longer. No itemized deductions, no charity deduction. That’s not all bad if you get a bigger deduction without specifically deducting any charity donations, but still, it hurts to have lost that all-American tradition of deducting our donations.
For quite some time, there has been an option for folks over 70 who have IRA Required Minimum Distributions. They could have their IRA administrator give up to $100,000 a year directly from the IRA to named charity organizations and reduce their taxable income while still taking the standard deduction.
But now, thanks to the One Big Beautiful Bill Act (OBBBA), starting in 2026, there is some relief for non-IRA owners. Charitable donations are deductible in excess of 0.5% of Adjusted Gross Income. In addition, the OBBBA extends a modified version of the rule that reduces itemized deductions for certain high-income taxpayers (in essence reducing their deduction for charity donations).
But there is good news for non-itemizers who take the standard deduction. They can deduct up to the first $1,000 ($2,000 for joint filers) of monetary charity donations (cash only, not allowed to use this for non-cash stuff given to the Salvation Army).
A key point to remember is that the contributions must be made in cash or cash-like form to qualified charitable organizations. You need to have good records of how much you gave, to whom, and when. Cash contributions made to individuals, political organizations or other entities without the requisite tax status don’t qualify.
This calls for a little advanced tax planning. If you have other reasons that will allow you to itemize (large medical bills, large taxes on sales tax or property tax, or new larger mortgage), then you might want to increase your charity donations (multiple years’ worth at once?). In that same year, it might be a good idea to go through your house and give a lot of clothes and stuff to the Salvation Army. Or, if you are not itemizing, you could delay your charity giving if you’ve topped out at $2,000 for joint ($1,000 for singles) already.
In answer to my initial question. No, it is not wrong to want to deduct your charity donations. Now, you can deduct at least some of them. No go out there and be generous!
Have you heard? Prov 22:9 says, “He who has a generous eye will be blessed, for he shares his food with the poor.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.
