Your Charitable Deductions Tax Guide (2025 & 2026)

The IRS recently released its annual tax inflation adjustments for the 2026 tax year. This year's update also incorporates significant changes from the One Big Beautiful Bill Act (OBBBA), which was signed into law in 2025.

That means you have all the details needed for both filing your 2025 taxes and planning your tax strategy for 2026. It's a smart time to see how you can maximize your charitable contributions and continue to support the causes and organizations you care about.

To help you navigate the latest IRS tax updates from 2025 to 2026, we've put together a comprehensive guide including the updated tax brackets, charitable deduction limits, how much of a charitable donation is tax-deductible, which assets are best to donate to charity, and much more.

What are the tax brackets for 2025 and 2026? How do they impact my tax deductions?

The IRS adjusts tax brackets annually based on inflation. Depending on how much you earn, you may be in a lower tax bracket than last year, or at least have less of your income taxed at a higher rate. That's because your entire income is not taxed at your maximum tax rate.

Each income threshold is taxed at the corresponding tax rate, creating an overall effective tax rate. If you're a single filer, your first $11,925 in 2025 of earned income will only be taxed at 10%, regardless of your total earnings. That also could make it easier for you to qualify for a lower tax rate, particularly with charitable deductions.

In addition to federal taxes, your income is subject to state taxes, unless you live in one of the nine states that don't charge income tax. In California, for instance, the highest bracket for single filers earning $1 million or more and married couples earning $2 million or more is 13.3%.

2025 Tax Brackets

These are the current tax brackets for 2025, which you will file in 2026.

Source: IRS

2026 Tax Brackets

Tax brackets have shifted for 2026. When it comes time to file in 2027, here are the rates associated with each income level and filing status.

Source: IRS

What are the standard deductions for 2025 and 2026?

The standard deduction is another key component to consider as part of your tax strategy. Standard deductions apply to all tax brackets and determine whether itemizing deductions (including charitable contributions) makes sense for your situation.

Here are the 2026 standard deductions compared to the 2025 tax year:

Source: IRS

While increased standard deductions mean lower taxable income for many taxpayers, it also means you must surpass a higher threshold to itemize your deductions and claim charitable contributions. However, there is a tax strategy called "bunching" that many people use to lower their tax bill with charitable deductions, which you'll learn more about below.

What are the charitable contribution limits for 2025 and 2026?

Charitable giving tax deduction limits are set by the IRS as a percentage of your adjusted gross income (AGI). Cash contributions in 2025 and 2026 can make up 60% of your AGI. The limit for appreciated assets in 2025 and 2026, including stock, is 30% of your AGI. Contributions must be made to a qualified 501(c)(3) organization.

Important 2026 changes: Itemized charitable deductions will only apply if your donations exceed 0.5% of your AGI. Additionally, for high earners in the 37% tax bracket, the value of charitable deductions will be capped at 35%.

Start saving more on your taxes and give with Daffy.

Can you take charitable tax deductions without itemizing in 2025 & 2026?

In 2025: No, to take a tax deduction for your charitable contributions in 2025, your total itemized deductions must exceed the standard deduction for your tax filing status.

In 2026: Non-itemizers can deduct up to $1,000 ($2,000 for married filing jointly) in charitable contributions even if they take the standard deduction.

It's important to understand all of your eligible tax deductions so that you can determine whether to itemize in 2025, or take advantage of the new above-the-line deduction in 2026.

What can you take a tax deduction for?

To make a charitable donation tax-deductible in 2025, you have to itemize your deductions. There are several common tax deductions you can take in addition to your charitable contributions.

The most common itemized deductions include:

• Mortgage interest: Home mortgage interest can be deducted on up to $750,000 of debt, depending on your filing status. If you are married filing separately, the limit drops to $375,000
• Medical and dental expenses: Unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income
• Home equity loan interest: Interest from a home equity loan or HELOC, if the funds were used to buy, build, or significantly improve your home
• State and local taxes (SALT): State income taxes (or sales taxes, but not both) and property taxes can be deducted up to $40,000 ($20,000 if married filing separately) in 2025. The new cap, part of the OBBBA changes, will increase by 1% each year from 2026 through 2029, before reverting to $10,000 ($5,000 if married filing separately) in 2030. Note that this cap begins to phase out for taxpayers with modified adjusted gross income above $500,000.

Once you add up all your eligible tax deductions, see how close you are to the standard deduction. Depending on your situation, you may even exceed the limit without charitable contributions. However, don't forget that charitable donations can be deducted up to 30-60% of your adjusted gross income and are one of the most generous income tax deductions available.

Either way, any gap between your itemized and standard deduction can help determine what size of a charitable donation you may want to give.

Example calculation: Let's look at mortgage interest and property taxes, which are two of the most common itemized deductions. Say your current mortgage balance is $750,000 and your 30-year mortgage has a 3.5% interest rate. In your first year of making payments, your interest would total $26,000. On top of that, say your local property tax bill is about $10,000. Your total itemized deductions would be $36,000, which is above the standard deduction for all filing types in 2025 and 2026.

How to maximize charitable tax deductions: The bunching strategy

Don't worry, you're not alone if you give to charity regularly but aren't hitting the threshold for itemizing taxes. With the current standard deduction so high, many people are not able to hit the threshold for itemizing deductions.

However, there's a smart tax strategy that's gotten more and more popular called "bunching", which involves grouping multiple years of charitable donations into one year and taking the standard deduction in the other years.

Bunching example: A single tax filer who wants to give $8,000 a year to charity isn't close to reaching the $16,100 standard deduction threshold for 2026. However, by bunching, they can double that amount by combining two years of contributions in one tax year, totaling $16,000. With this strategy and common expenses that qualify for tax deductions like mortgage interest and medical expenses, they can easily exceed $16,100.

Why bunching is even more important in 2026

This strategy is becoming even more important in 2026 due to two new rule changes:

1. 0.5% AGI floor: Itemized charitable deductions will only apply if your donations exceed 0.5% of your AGI. Bunching helps you clear this "floor" in a single year, so you don't miss out on the deduction year after year.
2. 35% cap for high earners: For high earners in the 37% bracket, the value of your deduction is capped at 35%.

How donor-advised funds make bunching easy

Donor-advised funds like Daffy make bunching charitable contributions simple and strategic. You can contribute the amount you'd like to bunch to your Daffy fund and immediately receive the tax deduction for that amount. You can then distribute those funds to your chosen charities on your own timeline.

So if we continue with the previous example, you can bunch two years of contributions ($16,000) into your Daffy fund in 2026, claim the full deduction, and then continue to give $8,000 annually in 2026 and 2027 from the funds you've already set aside. This approach lets you maximize your tax benefits while maintaining your regular giving rhythm to the organizations you support.

What are the best assets to donate to charity for maximum tax savings?

While you may be used to donating with cash, a check, or a credit card, donating appreciated assets like stocks, ETFs, index funds, and cryptocurrencies could yield significantly higher tax savings.

Tax benefits of donating appreciated stock

If you donate a stock held for more than a year directly to a charity or to donor-advised funds like Daffy, you receive three major tax benefits:

1. Avoid capital gains taxes: You'll avoid paying capital gains taxes on the stock appreciation (up to 20% federal plus 3.8% net investment income tax plus state taxes)
2. Deduct full fair market value: You can immediately deduct the full fair-market value of the stock on your federal income tax returns for that year rather than just your cost basis
3. More to charity: Because the organization receiving the stock is a 501(c)(3), they don't have to pay taxes on liquidating the stock, meaning the full amount goes to the organization you care about

This creates a double-win for your tax strategy and your charity of choice.

Why Daffy makes donating appreciated assets easy

Since the majority of nonprofits can't receive donations of stock, index funds, mutual funds, and cryptocurrencies directly, that's where Daffy comes in. One major benefit of using Daffy is that you'll never have to worry about whether your favorite nonprofit accepts the appreciated asset. Daffy does all the hard work for the organization and delivers the donations in cash to any of the 1.7 million nonprofits supported.

What documentation do you need to claim a charitable contribution deduction?

The first step to ensure your contribution is tax-deductible is to confirm that the recipient organization is tax-exempt, which is another great advantage of using Daffy. Since Daffy (like all donor-advised fund providers) is a registered 501(c)(3), your contributions to your Daffy fund are tax-deductible immediately. Plus, we'll provide you with a simple tax summary at year-end.

Required documentation for charitable deductions

If you donate elsewhere, you'll need the following information when tax season rolls around:

• The name of the organization and the donation amount
• A bank or credit card statement showing the amount that came out of your account and on what date
• A receipt from the organization

Additional forms for non-cash donations

You may also need to fill out extra tax forms depending on your contribution type. Non-cash donations over $500 require IRS Form 8283:

• Fill out Section A if your contribution is between $500 and $5,000
• Fill out Section B along with an appraisal for non-cash contributions over $5,000

Filing this information right away makes tax season easier and also keeps you prepared in case of a future audit. Alternatively, if you give through Daffy, you'll have your entire giving history stored for you, making tax season a breeze.

How much can you claim in charitable donations without receipts?

The receipt requirements depend on what type of contributions you give and how much:

• Under $250: Any contribution of cash or property under $250 does not require a receipt from the charity. However, any cash, check, or other monetary gift does require either a bank record or acknowledgment from the organization, regardless of the size of the gift.
• $250 or more: Contributions of $250 or more require both a bank record and written acknowledgment from the organization with the details of your donation.

Of course, with Daffy, all your donation receipts are automatically stored for you and accessible anytime.

Ready to maximize your charitable tax deductions?

With major tax changes taking effect in 2026—including the new 0.5% AGI floor and the 35% deduction cap for high earners—now is the perfect time to optimize your charitable giving strategy.

Daffy makes it easy to:

• Bunch contributions to maximize deductions before the 2026 changes
• Donate appreciated assets like stocks and crypto without worrying about nonprofit capabilities
• Store all your tax documentation in one place with automatic year-end summaries
• Support 1.7 million nonprofits with cash donations processed seamlessly

Whether you're looking to navigate the 2026 rule changes, simplify your giving, or maximize your tax benefits, Daffy provides the modern solution to make charitable giving work harder for you and the causes you care about.

Get started with Daffy today and take control of your charitable giving for 2025 and beyond.

Please note that the information contained on this page is for educational purposes only and should not be considered tax or investment advice. Any calculations are intended to be illustrative and do not reflect all of the potential complexities of individual tax returns. To assess your specific situation, please consult with a tax and/or investment professional.