Charitable Impact of One Big Beautiful Bill Act: What Advisors Need to Know
The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. At nearly 900 pages, the legislation includes major tax policy changes, several of which directly affect charitable giving and estate planning.
Here are three key takeaways for CPAs, financial advisors, and estate planning attorneys:
1. Standard Deduction Increased + New Limits on Itemized Giving
What changed:
Standard deduction now $15,750 (single) and $31,500 (joint)
“Bonus” deduction for taxpayers 65+ extended through 2028
New floor: Charitable deductions allowed only for amounts exceeding 0.5% of adjusted gross income (AGI)
New cap: Top-bracket taxpayers limited to a 35 percent deduction, not their full 37 percent rate
60 percent AGI limit for cash gifts to public charities remains in place
Why it matters:
These changes may lead fewer clients will itemize and high earners may see less tax benefit from giving.
Action steps for advisors:
Flag clients affected by the 0.5 percent AGI floor and consider bundling donations - we can help with this!
Plan charitable gifts for clients in the top bracket to maintain tax efficiency
Use alternatives like qualified charitable distributions or non-cash gifts
Emphasize non-tax motivations when discussing charitable giving with clients such as impact, legacy, and community values
2. New Deduction for Non-Itemizers
What changed:
Starting in 2026, non-itemizers can deduct:
• $1,000 (single)
• $2,000 (joint)Donor-advised fund gifts are excluded. We can help connect your client with an eligible fund that matches their philanthropic goals!
This deduction is permanent and not scheduled to sunset
Why it matters:
This new above-the-line deduction may encourage more households to give charitably
Action steps for advisors:
Talk with early-career and modest-income clients about using this deduction to support their community
Help clients establish consistent giving habits
Position this change as an entry point to longer-term philanthropic planning
3. Estate Tax Exemption Made Permanent
What changed:
The elevated exemption will not sunset at the end of 2025
New unified credit and GST (Generation Skipping Trust) exemptions:
• $13.99 million (single) / $27.98 million (joint) in 2025
• Increasing to $15 million and $30 million in 2026
Why it matters:
Clients can continue long-term estate planning with clarity, but the exemption level may not be permanent.
Action steps for advisors:
Review estate plans for high-net-worth clients and update as needed
Discuss charitable bequests, charitable remainder trusts, and other giving tools
Encourage clients to plan now while the higher exemptions are in place
The Bottom Line
Let’s partner to help your clients and our community. HCCF is available to talk charitable strategies, offer technical guidance, and help you meet your clients’ philanthropic goals now and in the future. We’re always here to help! Contact us at 989-269-2850 or mackenzie@huroncounty.com.
This content is for informational purposes only and is not legal, tax, or financial advice.