Tax changes: here’s what to know for 2026

As 2026 approaches, new federal tax laws bring key changes at the intersection of charitable giving and estate planning. Here are three of the biggest things to know:

New deductions

Effective starting in the 2026 tax year, taxpayers who take the standard deduction can now claim an above-the-line charitable deduction:

• $1,000 for individuals
• $2,000 for married couples filing jointly

Additionally, there’s now a bonus deduction for seniors.

Taxpayers age 65 or older may claim an additional $6,000 deduction ($12,000 for joint filers if both are 65+). It phases out gradually beginning at approximately $75,000 Adjusted Gross Income (AGI) for single filers and $150,000 for joint filers. This deduction applies to both those who itemize and those who take the standard deduction. 

Floor on charitable deductions

Itemized charitable deductions will be subject to a new 0.5% AGI floor beginning in the 2026 tax year. This means only the portion of charitable contributions that exceeds 0.5% of AGI is deductible.

Example:

A donor with $500,000 AGI gives $10,000 in charitable contributions. Under the new rules, the first 0.5% of AGI ($2,500) is not deductible, leaving $7,500 eligible for deduction. This change modestly reduces the tax benefit for itemizers but may influence gift timing.

The 0.5% AGI floor applies only to itemizers and takes effect for tax years beginning after Dec. 31, 2025. Carry-forward provisions remain available for disallowed contributions.

New estate tax exemption

The lifetime exemptions for estate, gift and generation-skipping transfer taxes are raised from the 2025 level of $13.99 million to a flat $15 million per individual, starting Jan. 1, 2026. For married couples, this effectively doubles to $30 million.

Under previous law, these increased amounts were set to “sunset” at the end of 2025, but they have now been made permanent and subject to future inflation indexing.

Summary of key tax changes

Provision	Effective Year	Summary
0.5% AGI floor on charitable deductions	2026	Itemizers can only deduct gifts exceeding 0.5% of AGI
Non-itemizer charitable deduction	2026	Up to $1,000 single/$2,000 joint for cash gifts
60% AGI limit made permanent	2026	Cash gifts to public charities remain deductible up to 60% of AGI
Cap on value of deduction	2026	Top earners limited to 35% tax benefit for charitable gifts
Bonus deduction for ages 65+	2025-2028	$6,000 additional deduction per taxpayer age 65 or older

 

Contact the Office of Gift Planning to see how our gift planning specialists can help you create a meaningful and tax-saving gift that ensures Auburn can continue to inspire, innovate and transform.