Charitable giving strategies for individuals in 2026: bunching, donor-advised funds, appreciated stock and IRA gifts

Figures are for tax year 2026. This Guide is for an individual who gives to charity and wants the largest federal income tax deduction from it, and for that person's adviser: a high earner, a retiree with an IRA, or someone holding shares that have risen in value. It is federal only. It covers the charity rules changed by the One Big Beautiful Bill Act, Public Law 119-21 (text on govinfo.gov), which apply to taxable years beginning after 31 December 2025, and the long-standing rules in section 170 of the Internal Revenue Code (LII mirror of the U.S. Code). It does not cover gifts by corporations, trusts or estates, charitable remainder trusts, conservation easements or private foundation management.

Related Guides: for every 2026 federal change in one place, see us-2026-federal-tax-changes. For gift tax and estate planning, see us-estate-gift-706-709. For holding periods, basis and capital gains rates, see us-capital-gains. For SEP and SIMPLE IRAs, see us-self-employed-retirement. This Guide stops at the edge of each.

The method, step by step

1. Decide whether the person will itemize for 2026. Compare the itemized deductions (charity after the floor in step 4, plus state and local taxes, mortgage interest and the rest) with the 2026 standard deduction in the Rev. Proc. 2025-32 table below. Source: Rev. Proc. 2025-32.
2. If the person will not itemize, apply the non-itemizer deduction for cash gifts (section 170(p), from 2026) and stop. Only cash gifts to a public charity count, and not gifts to a supporting organization described in section 509(a)(3) or to a donor-advised fund. Source: 26 U.S.C. 170(p), LII mirror.
3. If the person will itemize, sort each gift by what was given (cash, long-term appreciated property, other property) and to whom (a public charity described in section 170(b)(1)(A), or another organization such as most private foundations). Apply the percentage limits of the contribution base in the section 170 table below. Contribution base means adjusted gross income computed without any net operating loss carryback. Source: 26 U.S.C. 170(b), LII mirror.
4. From 2026, apply the floor: the deduction is allowed only to the extent the year's gifts exceed 0.5 percent of the contribution base (section 170(b)(1)(I), added by section 70425 of the Act). Source: Public Law 119-21.
5. From 2026, if taxable income plus itemized deductions goes above the start of the 37 percent bracket, apply the section 68 reduction of 2/37 (section 70111 of the Act). It is applied after every other limit. Source: Public Law 119-21.
6. Carry any excess over a percentage limit forward for up to 5 years (section 170(d)(1)). Source: 26 U.S.C. 170(d), LII mirror.
7. For a person aged 70½ or older with a traditional IRA, test a qualified charitable distribution (section 408(d)(8)) before writing a cheque. Source: 26 U.S.C. 408(d)(8), LII mirror.
8. Collect the paperwork before the return is filed: the charity's written acknowledgment, the bank record, Form 8283 for property, and an appraisal where one is needed. Source: 26 U.S.C. 170(f), LII mirror and Pub. 526.

What changed for 2026

All four changes below apply to taxable years beginning after 31 December 2025. For a calendar-year individual that means 2026 and later. Gifts made in 2025 were deducted under the old rules, and the 2025 year is now closed: a gift is deducted in the year it is paid (section 170(a)(1)), so a gift made in 2026 cannot be moved back into 2025.

• Non-itemizer deduction (section 70424, section 170(p)). An individual who does not elect to itemize may deduct cash gifts up to the single amount in the Act table below (the joint amount on a joint return). It is taken on top of the standard deduction (section 63(b)(4), LII mirror). Only gifts made in cash to an organization described in section 170(b)(1)(A) count, and not gifts to a supporting organization described in section 509(a)(3), and not gifts "for the establishment of a new, or maintenance of an existing, donor advised fund". Gifts of property never count. The 0.5 percent floor and the carryover rules do not apply to this deduction (section 170(p) is "determined without regard to subsections (b)(1)(G)(ii), (b)(1)(I), and (d)(1)"). The Act removed the old "beginning in 2021" limit, so the deduction has no end date. For 2025 it did not exist.
• 0.5 percent floor for itemizers (section 70425, section 170(b)(1)(I)). An individual's charitable deduction is allowed "only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer's contribution base". This is a floor, not a cliff: the first slice is lost and the rest is allowed. The floor is taken from the gift categories in the order the Act sets: first section 170(b)(1)(D) gifts (capital gain property to organizations other than public charities), then (C) (capital gain property to public charities), then (B), then (E), then (A), and last (G) (cash to public charities). The amount lost to the floor carries forward only from a year in which a percentage limit is also exceeded (section 170(d)(1)(C)); in any other year it is lost for good.
• 60 percent cash limit made permanent (section 70425(b)). Cash gifts to public charities stay deductible up to the 60 percent limit in the Act table below.
• 2/37 reduction of itemized deductions (section 70111, new section 68). For an individual, total itemized deductions, including charity, are reduced by 2/37 of the lesser of (1) the itemized deductions and (2) the amount by which taxable income, increased by the itemized deductions, exceeds the start of the 37 percent bracket for that filing status. It "shall be applied after the application of any other limitation". Only people whose taxable income, before itemized deductions are taken off, reaches the start of the 37 percent bracket are affected. The Act states the fraction; it does not print a percentage cap on the value of the deduction, so this Guide does not state one.

Item	Value	Note
Source	all figures below	https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm
Non-itemizer cash deduction, from 2026, single and other returns	USD 1,000	"inserting "$1,000 ($2,000"" (section 70424)
Non-itemizer cash deduction, from 2026, joint return	USD 2,000	same sentence
Floor for individuals who itemize, from 2026	0.5 percent	"exceeds 0.5 percent of the taxpayer's contribution base" (section 70425)
Cash gifts to public charities, limit, permanent	60 percent	"60 percent of the taxpayer's contribution base for the taxable year"
Itemized deduction reduction for the 37 percent bracket, from 2026	2/37	"shall be reduced by 2/37 of the lesser of" (section 70111; the Act prints the fraction between backslashes)

Item	2026 value	Note
Source	all figures below	https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
Standard deduction, married filing jointly and surviving spouses	USD 32,200	"Married Individuals Filing Joint Returns and Surviving Spouses $32,200"
Standard deduction, head of household	USD 24,150	"Heads of Households (§ 1(j)(2)(B)) $24,150"
Standard deduction, single and married filing separately	USD 16,100	"Unmarried Individuals (other than Surviving Spouses and Heads of $16,100"
Start of the 37% bracket, married filing jointly	USD 768,700	"plus 37% of the excess over $768,700"
Start of the 37% bracket, single and head of household	USD 640,600	"Over $640,600"
Start of the 37% bracket, married filing separately	USD 384,350	"Over $384,350"

How much an itemizer can deduct: the section 170 limits

Each limit is a share of the contribution base for the year. A gift over a limit is not lost: the excess carries forward (see the carryover section). The percentages below apply to individuals in 2026 and did not change; the Act added the floor, made the 60 percent cash limit permanent and reworded the coordination clause of section 170(b)(1)(B) (section 70425(b)(2)).

Item	Value	Note
Source	all figures below	https://www.law.cornell.edu/uscode/text/26/170
Gifts to public charities (section 170(b)(1)(A) organizations), general limit	50 percent	"shall be allowed to the extent that the aggregate of such contributions does not exceed 50 percent of the taxpayer’s contribution base"
Gifts to other organizations, such as most private foundations (section 170(b)(1)(B)): the lesser of this share or the room left under 50 percent after gifts to public charities	30 percent	"(i) 30 percent of the taxpayer’s contribution base for the taxable year, or (ii) the excess of 50 percent of the taxpayer’s contribution base for the taxable year over"
Long-term capital gain property given to a public charity (section 170(b)(1)(C))	30 percent	"shall not exceed 30 percent of the taxpayer’s contribution base for such year"
Long-term capital gain property given to other organizations (section 170(b)(1)(D)): the lesser of this share or the room left under 30 percent after capital gain gifts to public charities	20 percent	"(I) 20 percent of the taxpayer’s contribution base for the taxable year, or (II) the excess of 30 percent of the taxpayer’s contribution base for the taxable year over the amount of the contributions of capital gain property to which subparagraph (C) applies"
Written acknowledgment needed for any single contribution of this amount or more (section 170(f)(8))	USD 250	"for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment"
Property: description with the return when the deduction claimed is more than (section 170(f)(11)(B))	USD 500	"for which a deduction of more than $500 is claimed"
Property: qualified appraisal when the deduction claimed is more than (section 170(f)(11)(C))	USD 5,000	"for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal"

Who is a public charity for these limits: churches, schools, hospitals, publicly supported charities and the other organizations listed in section 170(b)(1)(A). A donor-advised fund's sponsoring organization is never a private foundation (section 4966(d)(1), LII mirror).

Bunching gifts into one year

The standard deduction is a fixed amount. Itemized deductions help only in the part above it. From 2026 the 0.5 percent floor also takes a slice off each year's gifts. Giving two or more years of gifts in one year, then taking the standard deduction in the other years, can raise the total deduction over the period. A donor-advised fund lets the person deduct the bunched amount now and choose the charities later.

Worked example. Every amount below is hypothetical except the 2026 standard deduction and the 0.5 percent floor, which come from the tables above. It assumes a married couple filing jointly, the same income and the same standard deduction in 2027 as in 2026 (the 2027 amount will be indexed and will differ), all gifts in cash to public charities or to a donor-advised fund whose sponsoring organization is a public charity, and no gifts that would use the non-itemizer deduction. The floor rule is section 70425 of the Act; the standard deduction is the Rev. Proc. 2025-32 figure.

Hypothetical step	Amount	Working
Source	all figures below	https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm
Contribution base, each year (hypothetical)	USD 300,000	assumed
Floor, each year	USD 1,500	USD 300,000 x 0.5 / 100
Other itemized deductions, each year (hypothetical)	USD 18,000	state and local tax, mortgage interest
Usual giving, each year (hypothetical)	USD 20,000	cash to public charities
Plan A, itemized deductions in 2026 and again in 2027	USD 36,500	USD 18,000 + (USD 20,000 - USD 1,500); more than USD 32,200, so itemize
Plan A, two-year deduction	USD 73,000	USD 36,500 x 2
Plan B, giving bunched into 2026 (to a donor-advised fund)	USD 40,000	two years of gifts, nothing given in 2027
Plan B, itemized deductions in 2026	USD 56,500	USD 18,000 + (USD 40,000 - USD 1,500)
Plan B, two-year deduction	USD 88,700	USD 56,500 + standard deduction USD 32,200 in 2027 (2026 amount assumed)
Extra deductions from bunching over the two years	USD 15,700	USD 88,700 - USD 73,000

The floor is charged once in Plan B instead of twice, and the 2027 standard deduction is not wasted. The cash given in 2026 is well inside the 60 percent limit for this couple. Their income is far below the 37 percent bracket, so the 2/37 reduction does not apply. Bunching does not help when the person would itemize every year anyway with a wide margin, and it does not help a person who would take the standard deduction even in the bunched year.

In a year the person does not itemize, cash gifts made directly to a public charity (not to a donor-advised fund and not to a section 509(a)(3) supporting organization) can still use the non-itemizer deduction in the Act table above.

Donor-advised funds

A donor-advised fund is a fund or account that is separately identified by reference to a donor's contributions, is "owned and controlled by a sponsoring organization", and over which the donor (or someone the donor appoints) has or expects to have advisory privileges over distributions or investments (section 4966(d)(2), LII mirror).

• Timing. The deduction is for the year the donor pays into the fund, because section 170(a)(1) allows a contribution "payment of which is made within the taxable year". The sponsoring organization owns the money from then on; grants it later makes to other charities are its own distributions.
• Conditions. No deduction is allowed for a contribution to a donor-advised fund unless the sponsoring organization is not a war veterans' organization, a fraternal society or a nonprofit cemetery company (Pub. 526), and not a type III supporting organization that is not functionally integrated, and the donor obtains a contemporaneous written acknowledgment from the sponsoring organization "that such organization has exclusive legal control over the assets contributed" (section 170(f)(18), LII mirror).
• Not for non-itemizers. Cash paid "for the establishment of a new, or maintenance of an existing, donor advised fund" does not count for the non-itemizer deduction of section 170(p), in 2026 or later.
• Not for IRA charitable distributions. A qualified charitable distribution cannot go to a donor-advised fund (section 408(d)(8)(B)(i)).

Giving appreciated long-term stock

Capital gain property means a capital asset that, if sold at fair market value at the time of the gift, would have produced long-term capital gain (section 170(b)(1)(C)(iv)). For holding periods, see us-capital-gains.

• Amount of the deduction. Section 170(e)(1)(A) reduces a gift of property only by "the amount of gain which would not have been long-term capital gain" if the property had been sold at fair market value. For long-term shares given to a public charity that reduction is nil, so the deduction is generally the shares' fair market value on the date of the gift. Pub. 526 says the same: "you can generally use the FMV of the property". The deduction must be cut to the shares' basis when the gift goes to certain private nonoperating foundations (other than qualified appreciated stock) and in the other cases section 170(e)(1)(B) lists (Pub. 526).
• The gain. Giving the shares outright is not a sale or exchange as Pub. 544 defines them: "A sale is a transfer of property for money or a mortgage", note or other promise to pay money, and an exchange is a transfer of property for other property or services (Pub. 544). Pub. 526 treats only a bargain sale to a charity (a sale for less than fair market value) as "partly a charitable contribution and partly a sale or exchange". A person who sells the shares first and gives the cash has made a sale and reports the gain.
• Limits. Long-term capital gain property given to a public charity is limited to the 30 percent of the contribution base in the section 170 table, and is counted after the other gifts. A gift of the same shares to most private foundations is limited to the lesser of the 20 percent figure and the room left under 30 percent after capital gain gifts to public charities (section 170(b)(1)(D)). The excess carries forward for 5 years. The donor may elect the 50 percent limit instead, but only by reducing every capital gain gift made that year to the amount section 170(e)(1) leaves, usually basis (section 170(b)(1)(C)(iii)).
• Shares held one year or less are ordinary income property: the deduction is the fair market value minus the amount that would be short-term capital gain on a sale. Pub. 526: "Generally, this rule limits the deduction to your basis in the property".
• Timing. A properly endorsed stock certificate is treated as delivered on the date of mailing or delivery to the charity or its agent (Pub. 526). If the donor gives the certificate to the donor's own agent or to the issuing corporation for transfer into the charity's name, the gift "isn't delivered until the date the stock is transferred on the books of the corporation". Ask the broker for the transfer date before relying on a gift made late in December.
• Paperwork. Form 8283, Section A, goes with the return when the year's noncash gifts together are deducted at more than the section 170 table's USD 500 (Pub. 526 says Section A is also used for publicly traded securities). Publicly traded securities do not need a qualified appraisal, even above USD 5,000: section 170(f)(11)(A)(ii)(I) exempts "publicly traded securities" from the appraisal rule.

Qualified charitable distributions from an IRA

A qualified charitable distribution is a distribution from an individual retirement plan, other than an ongoing SEP or SIMPLE IRA (plans described in section 408(k) or (p)), that meets all of these conditions (section 408(d)(8), LII mirror):

• it is made directly by the trustee to an organization described in section 170(b)(1)(A), and not to a supporting organization described in section 509(a)(3) and not to a donor-advised fund; and
• it is made on or after the date the IRA owner reaches age 70½; and
• a deduction for the entire distribution would be allowable under section 170 (ignoring the percentage limits), and the donor holds the same written acknowledgment needed for a deductible gift (Pub. 590-B).

The distribution is left out of gross income up to the annual limit in the table below for 2026. The limit is per taxpayer: on a joint return each spouse who qualifies has a separate limit (Pub. 590-B). Any amount above the limit is taxed like any other distribution. The excluded amount is not also deductible under section 170 (section 408(d)(8)(E)). The exclusion is reduced by deductible IRA contributions made for years ending on or after the date the owner reaches age 70½, to the extent not already used. Only the part that would otherwise be taxable can be a qualified charitable distribution. A qualified charitable distribution counts toward the owner's required minimum distribution for the year: Pub. 590-B states "A QCD will count towards your required minimum distribution".

Because the amount never enters income, a qualified charitable distribution can help a person who takes the standard deduction and a person who would lose part of the deduction to the 0.5 percent floor. The 2026 limit is indexed each year from 2024 (section 408(d)(8)(G)).

Item	Value	Note
Source	all figures below	https://www.irs.gov/pub/irs-drop/n-25-67.pdf
Qualified charitable distributions excluded from income, 2026, per taxpayer	USD 111,000	"408(d)(8)(A) is increased from $108,000 to $111,000"

Carrying excess gifts forward

If an individual's gifts to public charities exceed the year's percentage limit, the excess is treated as paid in each of the 5 succeeding taxable years, in order of time, but only to the extent there is room under the limit in each later year (section 170(d)(1)(A), LII mirror). The 30 percent and 20 percent categories carry forward the same way (sections 170(b)(1)(B), (C)(ii) and (D)(ii)). From 2026 the amount lost to the 0.5 percent floor joins the carryover only for a year in which a percentage limit is exceeded (section 170(d)(1)(C), Public Law 119-21). The non-itemizer deduction ignores carryovers. A year in which the person takes the standard deduction still uses up carryover: the regulation (written when the carryover period was shorter) treats the carryover as "paid (but not allowable as a deduction)" in that standard deduction year (Treas. Reg. § 1.170A-10 on eCFR). A person with a carryover who plans to bunch should use it in the bunched year.

Proof the gift was made

• Any cash gift, whatever the size: a bank record or a written communication from the charity showing the charity's name, the date and the amount (section 170(f)(17)).
• A single contribution of USD 250 or more (the section 170 table): a contemporaneous written acknowledgment from the charity giving the amount of cash, a description (not a value) of any property, and whether the charity gave anything in return (and a good faith estimate of its value) (section 170(f)(8)). "Contemporaneous" means obtained by the earlier of the date the return is filed and the due date including extensions.
• Noncash gifts deducted at more than USD 500 in total for the year: Form 8283 with the return; Section A for each item deducted at USD 5,000 or less and for publicly traded securities of any amount (Pub. 526, heading on the total deduction for noncash gifts).
• Property deducted at more than USD 5,000 (other than publicly traded securities and the other exceptions in section 170(f)(11)(A)(ii)): a qualified appraisal by a qualified appraiser and Form 8283, Section B, signed by the charity (Pub. 526; valuation rules in Pub. 561).
• Donor-advised fund: the sponsoring organization's acknowledgment that it has exclusive legal control (section 170(f)(18)).

Ask the client first

• Will you itemize for 2026, and roughly how far above or below the standard deduction are your other itemized deductions? This decides between bunching, the non-itemizer deduction, or giving as usual.
• What is your expected adjusted gross income for 2026, and will taxable income plus itemized deductions pass the start of the 37 percent bracket? This sets the 0.5 percent floor, the percentage limits and whether the 2/37 reduction applies.
• What will you give (cash, listed shares, other property) and to whom (a public charity, a donor-advised fund, a private foundation, a supporting organization)? Each pairing has its own limit and its own paperwork.
• For shares: when did you acquire them, what is their basis, and are they publicly traded? This decides long-term treatment, fair market value or basis, and whether an appraisal is needed.
• Are you (or your spouse) aged 70½ or older with a traditional IRA, and do you have a required minimum distribution for 2026? This decides whether a qualified charitable distribution is open and useful.
• Do you have charitable carryovers from earlier years? They use up room under the 2026 limits.

When to refuse or refer

• Gifts of property other than listed shares worth more than USD 5,000 (real estate, private company shares, art, collectibles): refer for a qualified appraisal; the valuation is outside this Guide.
• Charitable remainder trusts, charitable lead trusts, charitable gift annuities, and the one-time qualified charitable distribution to a split-interest entity (section 408(d)(8)(F)): refer. For the gift and estate tax side of large gifts, see us-estate-gift-706-709.
• Conservation easements and any gift of a partial interest: refer.
• Gifts through a partnership, S corporation, trust or estate, or a corporation's own gifts: out of scope.
• A gift where the donor receives a benefit (a dinner, membership, tickets) or a bargain sale: compute only after the charity states the value of the benefit; refer if it is unclear.
• State income tax treatment: out of scope. States decide for themselves.
• Never state that a contribution to a donor-advised fund qualifies for the non-itemizer deduction or can be funded by a qualified charitable distribution. The law says it cannot.

Sources

• Public Law 119-21 (One Big Beautiful Bill Act), sections 70111, 70424 and 70425, text on govinfo.gov
• 26 U.S.C. 170, LII mirror of the U.S. Code
• 26 U.S.C. 63, LII mirror of the U.S. Code
• 26 U.S.C. 408, LII mirror of the U.S. Code
• 26 U.S.C. 4966, LII mirror of the U.S. Code
• Treas. Reg. § 1.170A-10 on eCFR
• Rev. Proc. 2025-32 (2026 inflation adjustments)
• Notice 2025-67 (2026 retirement and IRA amounts)
• IRS Publication 526, Charitable Contributions (2025)
• IRS Publication 544, Sales and Other Dispositions of Assets
• IRS Publication 561, Determining the Value of Donated Property
• IRS Publication 590-B, Distributions from Individual Retirement Arrangements (2025)