Donald Trump has given us our first relevant legislation recently with his “big beautiful bill.” This new law makes sweeping changes to tax deductions that could have a disproportionate impact on wealthy Americans. The bill spends trillions in tax breaks while adding new restrictions on all itemized deductions, especially affecting those earning the most. These changes, slated to begin phasing in starting in 2026, have led some financial experts to warn that high-income earners should start making plans now.
In short, under the new legislation, two major changes are important to those who itemize. First, the maximum benefit to filers in the top 37% income tax bracket will be limited starting in 2026. This change could result in smaller write-offs for donations to charity, something that would likely alarm many wealthy Americans. The legislation makes two other important changes to the charitable deduction. Single filers can take a maximum deduction of $1,000. Married couples filing jointly can deduct up to $2,000.
Justin Miller, partner and national director of wealth planning at Evercore Wealth Management. It’s important to note how much these changes would mean for high earners. He noted, “Many people, even those making $1 million, care about [saving] $3,750.” This sentiment highlights the fiscal impact of the new tax provisions on charitable giving.
This law sets the floor for itemized charitable deductions. This arbitrary “floor” caps the tax savings on your donations to only those that go over 0.5% of your adjusted gross income. For example, if a taxpayer has an AGI of $1 million and donates $100,000 to charity in the year 2025, he will be able to claim a deduction on his tax return. This generous donation will result in tax savings of $37,000. Starting in 2026, the new provisions will make that same $100,000 gift worth much less. This adjustment will determine how deeply you benefit or suffer from it.
For example, with the proposed new 0.5% floor, a $100,000 gift would only be worth $95,000 after the reduction. The second provision reduces this figure even further, by a rough amount of $5,135.13 due to the high earners cap. This limiting of the reduction is a stark example of how only rich people will see meaningful impacts on their tax bills for charitable contributions.
Below are eight strategies financial advisors are already recommending to their clients to be proactive in advance of 2026. Edward Jastrem, chief planning officer at Heritage Financial Services, urged individuals to consider their philanthropic plans for 2025 before the more generous charitable deduction disappears. In particular, he proposed that if donations are not time-sensitive, they should be delayed until January 2025 in order to take full advantage of tax benefits.
Pioneered by Miller, it’s an effective tactic for deepening philanthropic investment. He proposed leveraging donor-advised funds to completely front load charitable giving for the next three to five years. This ill-conceived approach would help the wealthiest Americans maximize their tax savings while undermining their philanthropic work.