Navigating new laws: Opportunities for 2025

It’s more important than ever to stay informed about how changes in the tax law may affect your charitable giving. The recently-passed One Big Beautiful Bill Act (OBBBA) creates challenges as well as opportunities for structuring your philanthropy. We encourage you to reach out to your attorney, CPA, and financial advisor to evaluate how the changes in the law impact your own situation.

As always, Centre Foundation is happy to work side-by-side with you and your tax advisors to build a plan for 2025 and beyond that not only supports your plans to make a difference in the community, but also addresses the rule changes under the OBBBA.

2025 is a big year to give! To help you along this journey, we’ve provided the checklist below of issues to discuss with your advisors:

1. Based on the increases to the standard deduction, you may want to talk with your tax advisors about ‘bunching’ charitable gifts for 2025 using a donor-advised fund at the community foundation. Through this technique, you can make several years’ worth of charitable contributions in a single year to exceed the standard deduction threshold, thereby maximizing tax benefits in that year. Over the following years, your donor-advised fund can distribute grants to charities over time according to your wishes.

2. Another reason for top-bracket donors to front-load giving in 2025: In 2026, a new provision under the OBBBA takes effect that allows you to take a deduction for charitable gifts only to the extent that your giving exceeds 0.5% of your AGI. What’s more, if you’re in the highest tax bracket, 37%, you can still only deduct charitable contributions at the 35% rate. The upshot here is that you and your tax advisors may decide that 2025 is the year to bunch charitable contributions to maximize tax savings.

3. New Standard Deduction in 2026 appealing to young/next generation donors: If you don’t itemize your deductions, you’ll be glad to know that starting in the 2026 tax year you can claim a deduction for cash gifts to qualifying public charities—up to $1,000 for single filers and $2,000 for married couples filing jointly. Keep in mind the new deduction, and, if you’re encouraging your adult children to get involved in philanthropy, make sure they are aware of this deduction. It could be particularly helpful for young people because many young people do not yet itemize.

4. QCDs are still a great idea for donors 70 ½ and older: A Qualified Charitable Distribution (QCD) enables individuals aged 70 ½ or older to donate up to $108,000 per year (as of 2025) directly from an IRA to eligible charities, and in the process exclude the donated amount from taxable income altogether–rather than relying on an itemized deduction. QCDs provide a direct tax benefit regardless of whether you itemize or take the standard deduction. Indeed, using a QCD to fulfill required minimum distributions (RMDs) can lower your adjusted gross income, potentially reducing taxes on Social Security income and Medicare surtaxes and helping you sidestep the new floors and caps on itemized charitable deductions imposed by the OBBBA starting in 2026.

Centre Foundation is happy to collaborate with you and your tax advisor as you explore ways to achieve your philanthropic goals under the new laws. We look forward to hearing from you!

Do You Have Any Questions? Contact us about partnering today – Kerry Tolton, Development and Stewardship Director at 814.237.6229, or email Kerry@centrefoundation.org.