On July 4th, President Trump signed into law the One Big Beautiful Bill Act (“OBBB”). While the bill primarily addresses broad tax policy, a few key provisions may impact charitable giving, particularly when it comes to planned and estate gifts. The good news? For most donors, the impact will be minimal, and the pathways to creating a meaningful, lasting legacy remain unchanged.
1.) Tax Brackets: The current tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are now permanent.
2.) Standard Deduction: The elevated standard deduction is now permanent — $15,750 for individuals and $31,500 for married couples in 2025. It will be indexed for inflation thereafter. What this means for your giving: If you don’t itemize, you may still benefit if you give appreciated stock, real estate, or (if you are 70 ½ or older) from your IRA.
3.) Deduction Limits for Cash Gifts: You can still deduct cash gifts to public charities up to 60% of your adjusted gross income (AGI) if you itemize.
1.) Estate Tax Exemption: The federal estate and gift tax exemption will increase to $15 million per individual (indexed annually).
2.) Tax Break for Non-Itemizers: Taxpayers who take the standard deduction may now deduct charitable gifts:
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- Up to $1,000 for individuals
- Up to $2,000 for married couples
What this means for your giving: Even smaller donations can make an impact on your taxes.
Note: Gifts to donor-advised funds and private foundations are excluded.
3.) New Floor for Itemizers: If you itemize, deductions will apply only to gifts exceeding 0.5% of your adjusted gross income (AGI).What this means for your giving: To make the most of your charitable deduction, consider maximizing your giving in 2025 to ensure you get the full benefit before the change takes effect.
4.) New Cap for Top Earners: The tax benefit for charitable deductions is capped at 35 cents per dollar for those in the highest tax bracket (previously 37 cents). What this means for your giving: If you are in the top tax bracket, consider maximizing your giving in 2025 to ensure you get the full benefit before the change takes effect.
5.) Corporations: Starting in 2026, corporations’ charitable contribution deductions will be subject to a 1%-of-taxable-income “floor,” meaning smaller contributions may no longer yield a deduction or may be subject to carry-forwards.
*The tax law may change — but your impact doesn’t. Donors give because they believe in something greater than themselves. If you are considering a planned gift or want help navigating the new rules, we are here to support you. Contact the foundation at umf@umfoundation.com or (662) 915-5944 and let us help you create a legacy that reflects your values and changes lives.*