Oct 2025 | New Tax Law: It Pays to Donate in 2025

The One Big Beautiful Bill Act (OBBBA), will affect tax strategies for the future, one of which is how charitable donations are treated.  If charitable giving is part of your plan, 2025 is the year to act. Making donations before the new rules kick in could mean a bigger impact for your favorite causes — and better savings for you.

What Does This Mean?

In 2025, when you donate to a charity, you can deduct the full amount (if you itemize), which lowers your taxable income. Beginning in 2026, the new law:

• Limits how much you can deduct, especially if you’re in the highest tax bracket.

• Disallows a small portion of your charitable deductions (0.5% of your income).

How Does This Impact You?

In short, every dollar you give won’t reduce your taxes as much as it will today.

Individuals who give regularly to charities, could see smaller tax breaks on the same donations starting in 2026. For high earners, the hit could be bigger.

Companies that donate large sums or appreciated assets (like stock) may lose out on thousands in tax benefits under the new rules.

What You Can Do:

·         Give sooner rather than later. Donations made in 2025 will get the maximum tax benefits under current rules.

·         Talk with your tax advisor at Bormel, Grice & Huyett, P.A.  It’s worth getting advice to make sure you’re giving in the smartest way possible.

For more information, please contact one of the experienced tax professionals at Bormel, Grice & Huyett, P.A. at 301-953-3259.