The recently enacted “One Big Beautiful Bill” includes several significant changes to charitable giving and tax strategy. These updates may influence how you choose to support the causes that matter most to you, including the zoo. Below is a summary of key changes and planning considerations:
Key Charitable Giving Changes to Be Aware Of
- Above-the-Line Deduction for Non-Itemizers
Taxpayers who do not itemize can now deduct up to $1,000 for individuals or $2,000 for married couples filing jointly for cash gifts to public charities.
- New 0.5% AGI Floor for Itemizers
For taxpayers who do itemize, charitable contributions are deductible only to the extent they exceed 0.5% of adjusted gross income (AGI), up to the existing 60% of AGI limit for cash gifts to public charities. Contributions that fall below the new 0.5% floor generally cannot be deducted unless the taxpayer also exceeds the 60% limit, in which case some carryforward options may apply.
- Cap for High-Income Taxpayers
For individuals in the top (37%) tax bracket, the maximum tax benefit is now capped at 35% of taxable income.
- Higher Standard Deduction
The standard deduction has increased, which should drive use of the above-the-lie deduction noted above.
Planning Opportunities and Strategies
- Strategic Timing of Gifts
Taxpayers may benefit from:
– Accelerating contributions into 2025 to avoid the new AGI floor which kicks in in 2026.
– “Bunching” contributions into a single year to exceed deduction thresholds
– Utilizing donor-advised funds, non-grantor trusts, charitable remainder trusts (CRTs), and charitable lead trusts (CLTs) to maximize tax efficiency
- Business and Alternative Giving Options
Business owners may be able to support charities through sponsorships or reimbursed employee volunteer expenses, which can be fully deductible as business expenses and are not subject to AGI-based charitable limits.
- Qualified Charitable Distributions (QCDs)
Taxpayers age 70½ or older may continue to make direct transfers from IRAs to qualified charities. QCDs are not subject to the new AGI floor, can reduce taxable income, and may satisfy required minimum distributions—making them a powerful giving tool.
With these substantial changes, we know donors may have questions about how best to navigate the new rules. We are here to help.
If you’d like guidance tailored to your situation or want to explore the giving strategies best aligned with your philanthropic goals, please reach out to our Development Team at [email protected]
Thank you for your continued generosity and for helping San Antonio Zoo protect wildlife, inspire learning, and enrich our vibrant community.