2026 Tax Law Changes Are Coming

Act Now* to Maximize Your Tax Advantages and Philanthropic Impact

The One Big Beautiful Bill Act (OBBB) makes several changes to charitable deductions beginning on January 1, 2026, which may affect how and when you give. Read on for more info about the changes and how you can maximize your tax savings and philanthropic impact before the end of 2025:

1. New “Floor” on Deductions for Itemizers
   
   What’s New: Beginning in 2026, itemizers can only deduct charitable giving that exceeds 0.5% of their adjusted gross income (AGI). For example, a couple with a $300,000 AGI can only deduct total contributions above $1,500 — so if you donate $25,000, only $23,500 will be deductible.
   
   What to Do by Dec 31: Consider creating a Donor Advised Fund (DAF), which gives you 2025’s deductibility while allowing you to make charitable gifts from the fund for years to come. Many Beth Am members use DAFs for their dues (yes, it’s kosher!) or Annual Campaign donations. DAF custodians used by our members include the Jewish Community Federation, Fidelity, or DAFGiving360 (formerly Schwab Charitable).
   
   If you already have a Donor Advised Fund, replenish it before December 31 to take full advantage of current deduction rules before the changes take effect.
    
2. Cap on Deductions for Higher-Income Itemizers
   
   What’s New: Starting in 2026, the tax benefit for charitable deductions for those in the 37% income tax bracket will be capped as if the taxpayer was in the 35% tax bracket. For example, a taxpayer in the 37% tax bracket who makes a charitable gift of $10,000 in 2025 will receive a tax savings of $3,700 (37% of $10,000); whereas, that same taxpayer, making the same $10,000 gift in 2026 will receive a tax savings of only $3,500 (35% of $10,000).
   
   What to Do by Dec 31: Ever heard of the term “bunching”? That’s pre-paying now the gifts you expect to make in future years. Accelerating contributions to Beth Am (you can pre-pay future dues, Annual Campaign donations, or just hold a credit on your Beth Am account to be applied for things you decide on later) before December 31, 2025, will minimize the negative impact of the new charitable deduction limits while maximizing the benefit to Beth Am.
    
3. IRAs and Stock Gifts
   
   What to Know: For donors 70 ½ years and older, Qualified Charitable Distributions (QCDs) from IRAs can be made up to $108,000 per person ($216,000 per couple) in 2025.
   
   What to Do by Dec 31: QCDs remain one of the most tax-efficient ways to give — reducing your taxable income while supporting our community. Gifts of appreciated stock are also tax advantageous, and can be used to pay dues or other gifts. Click here to download stock gift instructions (pdf).

As you consider how these changes may affect your giving, please consult with your financial professional to determine what’s best for your overall financial plan.

Questions? Contact Mandy Eisner, Director of Membership and Development at meisner@betham.org, (650) 493-4661, x213.
*Please note that the Beth Am offices will be closed from noon on Wednesday, December 24 through Thursday, January 1. Please reach out before December 22 if you have any questions. All checks, electronic transfers of cash or stock, and credit card charges dated in December will count for 2025 and will be reflected on your 2025 gift summary sent to all members in January.