Last year’s One Big Beautiful Bill Act placed a new floor under the deductibility of charitable contributions. Beginning in 2026, if you itemize, you may deduct only the amount of donations that, in aggregate, exceeds 0.5% of your adjusted gross income. The new rule may make donor-advised funds (DAFs) more attractive. You claim a charitable deduction in the year you make gifts to your DAF. You generally can recommend awarding grants to selected charities at your own pace, even if the grants aren’t released for years. A DAF can help you execute a “bunching” strategy, donating in alternating years to reduce the impact of the floor. Contact us to learn more.
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