{"id":142316,"date":"2025-10-23T05:00:00","date_gmt":"2025-10-23T09:00:00","guid":{"rendered":"https:\/\/bloomerang.com\/?p=142316"},"modified":"2025-10-21T14:38:40","modified_gmt":"2025-10-21T18:38:40","slug":"how-to-lead-your-donors-through-changing-tax-deductibility","status":"publish","type":"post","link":"https:\/\/bloomerang.com\/blog\/how-to-lead-your-donors-through-changing-tax-deductibility\/","title":{"rendered":"Tax deductibility is changing. Your donors need you to lead them through it."},"content":{"rendered":"

As new tax reforms take shape, the rules around charitable giving\u2014and what donors can deduct\u2014are shifting in ways that could significantly impact how and when people choose to give.<\/p>\n

For fundraisers, this isn’t just a matter of staying informed<\/b>; it’s a moment to step forward as a trusted source of clarity.<\/p>\n

Donors will have questions about how these changes affect their giving<\/b>, and if they don\u2019t get answers from you, they may hesitate\u2014or turn elsewhere.<\/p>\n

As a philanthropy facilitator, it\u2019s your job to plan your communications now<\/b>, so you can help donors make informed decisions and continue supporting the causes they care about in the most tax-beneficial way possible. Helping them with tax information<\/a> may also enable them to make a larger gift.<\/p>\n

What\u2019s changing: a clear, fundraiser- and donor-friendly summary of the tax reform<\/h2>\n

Congress has made significant changes to the tax code under the One Big Beautiful Bill Act (OBBBA<\/a>). While some elements of the 2017 Tax Cuts and Jobs Act (TCJA)<\/a> have been extended, others have been modified. Today, here’s what nonprofit fundraisers need to understand:<\/p>\n

1. New universal above-the-line deduction: $1,000 \/ $2,000<\/h3>\n

The final OBBBA law reinstates an above-the-line charitable deduction (Section 70424), allowing non-itemizing<\/i> taxpayers to deduct up to $1,000 for individuals or $2,000 for married couples annually\u202f– starting in tax year 2026<\/i>.\u202fThis is a notable change that has no sunset provision (as was the case with the 2017 Act). And gifts to donor advised funds<\/a> are excluded.<\/p>\n

Food for thought:<\/b> This makes deductibility relevant again for small and mid-level donors<\/b> who take the standard deduction. Now, they can additionally deduct a portion of charitable giving. So, this is something you can once again promote as an extra incentive for giving.<\/p>\n

2. Standard deduction still high<\/h3>\n

The legislation makes permanent the elevated standard deductions introduced by the 2017 TCJA, with inflation-related adjustments. The standard deduction for 2025 is increased to $15,750 for single filers and $31,500 for taxpayers who are married and filing jointly. The new law also expands the “bonus<\/a>” deduction for taxpayers 65 and older through 2028 (though it phases out at higher incomes — $175,000 single\/$250,000 couple).<\/p>\n

Food for thought: With a hefty standard deduction still in place, including a bigger seniors\u2019 bonus deduction, many donors won\u2019t itemize<\/b> — potentially reducing the value they place on deducting charitable gifts. In fact, after the 2017 TCJA went into effect, households itemizing deductions dropped to under 10%. So, all your messaging around \u201ctax deductible as provided by law\u201d or \u201clast chance to grab year-end tax deduction\u201d will pretty much fall on deaf ears (with the exception of the additional above-the-line deduction \u2013 relatively small pennies for major donors).<\/p>\n

Note: <\/b>For donors who have donor advised funds<\/a> (DAFs), the high standard deduction may encourage \u201cbunching<\/a>\u201d — a process whereby donors give several years\u2019 worth of contributions to a DAF in one year in which they itemize. This gives them the flexibility to recommend grants from their DAF over several years, taking the standard deduction in those years.<\/p>\n

3. 0.5% floor on itemized charitable deductions<\/h3>\n

Taxpayers who do<\/i> itemize will only be able to deduct the portion of their charitable gifts in excess of<\/i> 0.5% of their adjusted gross income (AGI). This giving floor is new, and means smaller itemized donations have less tax benefit. Here\u2019s how it works:<\/p>\n