Noon: Individual Tax Tips & Refund Strategies , 2026 Charitable Giving: New Tax Breaks for Families & Self-Employed Filers

September 9, 2026 • News

New Haven, Connecticut | Jose's Tax Service | September 9, 2026

Fall is the right time to review charitable giving plans. The One Big Beautiful Bill Act (OBBBA) changes the federal rules beginning with tax year 2026. Families, W-2 employees, retirees, and self-employed filers should decide how they will give, which organizations qualify, and whether standard deduction or itemized planning produces the better result.

The rules are precise. Documentation is required. A contribution may lead to a deduction, but it does not automatically create a tax benefit.

Start With Your Filing Method!

For 2026, the federal standard deduction amounts are:

$16,100 for single filers and married filing separately (MFS).
$24,150 for head of household (HOH) filers.
$32,200 for married filing jointly (MFJ) taxpayers and qualifying surviving spouses.

Compare your projected itemized deductions with the standard deduction before deciding how to structure charitable gifts. Include state and local taxes, mortgage interest, eligible medical expenses, and other deductible amounts in the comparison.

Then apply the charitable rules that match your filing method.

Use the New Non-Itemizer Deduction!

Beginning with tax year 2026, taxpayers who claim the standard deduction may claim a separate charitable deduction. Itemizing is not required.

The deduction is limited to:

$1,000 for single, head of household, married filing separately, and qualifying surviving spouse returns.
$2,000 for married filing jointly returns.

The gift must be:

A cash contribution.
Made to a qualifying public charity.
Properly documented.

The rule does not apply to contributions to:

Donor-advised funds (DAFs).
Private foundations.
Noncash property.
Gifts that do not meet the qualified-organization requirements.

This deduction is below the line. It does not reduce adjusted gross income (AGI) or modified adjusted gross income (MAGI). It is also subject to the annual limit. Excess contributions cannot be carried forward under this non-itemizer provision.

Example: Standard Deduction Filer

An MFJ couple gives $1,750 in cash to qualifying public charities during 2026. They claim the standard deduction. Their potential charitable deduction is $1,750, subject to the $2,000 annual limit.

If they give $3,000, the potential deduction remains limited to $2,000. The additional $1,000 does not create a non-itemizer carryforward.

Action step: Keep cash gifts to eligible public charities separate from gifts to a DAF or private foundation. The recipient matters.

Apply the New 0.5% AGI Floor When You Itemize!

Taxpayers who itemize deductions face a new 0.5%-of-AGI floor beginning in 2026. Only charitable contributions above 0.5% of AGI are deductible.

For example:

AGI: $100,000.
0.5% floor: $500.
Cash gifts to qualifying charities: $3,000.
Potential charitable deduction before other limitations: $2,500.

The first $500 is not deductible. The disallowed portion does not carry over.

This rule applies to charitable contributions generally, including cash and property gifts. It operates separately from the standard deduction decision and other itemized deduction limitations.

Consider Bunching!

If annual giving is below or near the 0.5% floor, consider concentrating multiple years of planned gifts into one tax year. This strategy is commonly called bunching.

A donor-advised fund may be used for an itemized-giving strategy. You can contribute in one year, potentially clear the floor, and recommend grants to charities over time. However, a contribution to a DAF does not qualify for the new non-itemizer deduction.

Do not bunch contributions without reviewing cash flow, AGI, investment assets, and projected itemized deductions. A tax professional should model both years.

The 60%-of-AGI limit for cash gifts to public charities is now permanent. The 0.5% floor still applies before the deductible amount is determined. Other percentage limits may apply to different organizations or property types.

Use Appreciated Stock Carefully!

If you own stock held for more than one year that has increased in value, consider donating the shares directly to a public charity.

A qualifying long-term appreciated stock gift may allow you to:

Deduct the stock’s fair market value (FMV), subject to the applicable 30%-of-AGI limit.
Avoid capital gains tax on the appreciation.
Transfer the full investment value to the charity without selling first.

Selling the stock and donating cash can create a taxable capital gain before the cash reaches the charity. Donating the shares directly may be more efficient.

Do not transfer appreciated stock without confirming the holding period, cost basis, valuation, receiving organization, and applicable AGI limitations. Publicly traded securities and privately held interests may have different reporting requirements.

Self-employed individuals should also separate charitable giving from business expenses. A personal charitable contribution generally belongs on the individual federal return, not as an ordinary Schedule C business expense. Maintain separate records in the business books.

Review QCD Options for Older Family Members!

A qualified charitable distribution (QCD) is a direct transfer from an IRA to a qualifying charity. An IRA owner generally must be at least age 70½ when the distribution is made.

A properly completed QCD can:

Be excluded from taxable income.
Satisfy all or part of a required minimum distribution (RMD).
Avoid the charitable percentage limits.
Avoid the new 0.5% itemized charitable floor.

A QCD is not also claimed as a charitable deduction. The tax benefit generally comes from excluding the qualifying amount from income.

The transfer must be made directly from the IRA trustee or custodian to the charity. A distribution paid to the IRA owner first may not receive the same treatment.

Action step: Ask the IRA custodian about direct charitable transfer procedures before year-end. Allow processing time.

Document Every Contribution!

The IRS requires substantiation. Missing records can lead to disallowance of the deduction, processing delays, penalties, or additional tax.

Use this checklist:

Cash gifts: Keep a bank record or written communication from the charity showing the organization, date, and amount.
Cash gifts of $250 or more: Obtain a contemporaneous written acknowledgment. It should state the amount contributed and whether goods or services were provided.
Noncash gifts over $500: Complete and attach Form 8283, Noncash Charitable Contributions.
Noncash gifts over $5,000: Obtain a qualified appraisal in most cases and complete the applicable section of Form 8283.
Appreciated securities: Keep the transfer confirmation, valuation details, and charity acknowledgment.
Quid pro quo gifts: Deduct only the amount above the value of the benefit received.

A gala ticket, auction purchase, or charity dinner is not fully deductible simply because it supports a nonprofit. If you pay $300 for an event ticket and receive benefits valued at $100, the potential charitable contribution is generally $200.

Meet the December 31 Deadline!

Charitable contributions are deducted in the year the contribution is made.

For 2026:

A check mailed by December 31, 2026 generally counts for 2026.
A credit card charged in 2026 generally counts for 2026.
An electronic transfer should be completed and documented in 2026.
A stock transfer must be completed under the applicable transfer rules.
A QCD must be processed directly by the IRA custodian in 2026.

Do not wait until December 31 to initiate a stock transfer, QCD, or large noncash contribution. Processing delays can move the contribution into 2027.

Verify the Charity Before Giving!

Use the IRS Tax Exempt Organization Search (TEOS) to verify that the organization is qualified to receive tax-deductible contributions.

Also review:

A charity’s public-facing status or fundraising materials do not replace IRS verification. Confirm the organization before transferring cash, securities, or property.

Review Connecticut Treatment Separately!

Federal and Connecticut rules may differ. Connecticut may not provide the same deduction, treatment, or timing result as the federal return. State tax credits, deductions, and charitable programs may also affect the federal calculation in certain circumstances.

Do not assume that a federal charitable deduction automatically applies on your Connecticut return. Review both returns together.

Build Your 2026 Giving Plan Now!

Use this five-step process:

Estimate AGI. Include wages, self-employment income, investment income, retirement distributions, and other expected income.
Compare deductions. Project the standard deduction and itemized deductions.
Classify each gift. Identify cash, appreciated stock, noncash property, QCDs, DAF contributions, and private foundation gifts.
Confirm documentation. Request acknowledgments and appraisals before filing.
Complete the transfer early. Protect the 2026 contribution date.

Jose’s Tax Service provides personalized federal and Connecticut tax preparation, year-round planning, virtual appointments, and in-person concierge service for New Haven families, W-2 employees, retirees, self-employed filers, and small business owners.

Schedule an appointment or request a quote. For local support, review our New Haven tax preparation services. You may also contact Jose’s Tax Service at (475) 254-9373.

Category: Tax Planning | Tags: tax refund, personal finance, IRS tips, New Haven taxes.