Thinking about giving back before the end of 2025? Planning your holiday giving and curious how the newest tax rules will affect your gifts? Here’s what you need to know, and how to plan ahead.
During a year with multiple shifts at the federal and state levels, significant changes were also made to the U.S. tax code with House Resolution 1. With new rules taking effect January 2026, the good news is that with smart planning today, you can maximize your charitable impact and your tax benefits.
Key Changes in 2026
- New cap on itemized deductions: Beginning in 2026, itemized income tax deductions will be capped at 35%, down from the current 37%. This reduces benefits for high earners.
- New floor on charitable deductions: Charitable deductions will only apply to contributions that exceed 0.5% of your adjusted gross income. (Example: If you earn $100,000, the first $500 of giving won’t count toward your deduction.)
For Nonitemizers
- For the majority of taxpayers who take the standard deduction: Good news! You’ll see an expanded tax break for your charitable giving. Starting in 2026, you can deduct up to $1,000 ($2,000 for couples) in cash donations.
Smart Moves Before 2026
While these changes may reduce the tax deductions of charitable giving for some, there are savvy steps you can make today to maximize your philanthropic impact and tax benefits:
- Open a Donor-Advised Fund (DAF): A DAF at Rose Community Foundation can be a powerful tool to support your charitable giving strategies. You can lock in the 2025 tax benefits while recommending charitable grants on your own timeline.
- Try “Bunching”: Combine multiple years of giving in 2025 to take advantage of the current deduction rules before H.R. 1 takes effect for 2026. If you have a donor-advised fund, consider adding more funds into your DAF this year to provide for future giving, while maximizing your charitable deductions in 2025.
- Use your Qualified Charitable Distribution before year-end. If you are age 70 ½ or older, you may use your QCD to donate directly to a charitable organization to receive the tax benefit. Consider making a gift to a fund of Rose Community Foundation, including the 30th Anniversary Endowment Campaign, Newcomers Fund or the Colorado Safe Futures Fund.
Why Planning Now Matters
Your year-end generosity fuels programs that strengthen Greater Denver communities and support the people living in them. As always, please reach out to your professional tax advisor for individual advice. If you would like more information on developing your own charitable giving strategy, please reach out to our Philanthropic Services team. To learn more about how Rose Community Foundation supports nonprofits and people living in Greater Denver communities, please visit our home page at www.rcfdenver.org.