When it comes to charitable contributions, the One Big Beautiful Bill Act (OBBBA) contains some good news and lots of bad news for non-profits and the taxpayers who contribute to them.

Let’s start with some good news.

New Charitable Deduction for Non-Itemizers

Through 2025, only taxpayers who itemize their personal deductions on their tax returns are allowed to deduct their charitable contributions.

This rule greatly limits the number of people who can take charitable deductions.

Because the standard deduction was roughly doubled by the Tax Cuts and Jobs Act (TCJA) in 2018, only about 10 percent of all taxpayers have been able to itemize since 2018 (though this number will likely go up as discussed below).

Thus, most taxpayers get no tax benefit from charitable contributions. Only higher-income taxpayers who have enough deductions to itemize get a tax benefit. This is doubtless one reason that households earning $200,000 or more account for 74 percent of all charitable donations.

Thanks to the OBBBA, a new rule goes into ... Log in to view full article.