What All Donors Should Know Before the Tax Deduction Laws Change

As we approach the end of 2025, Shatterproof wants to ensure that donors of all levels understand a unique opportunity to maximize their charitable giving before new federal rules take effect in 2026. 

The upcoming changes—part of the 2025 Reconciliation Act—will reshape how charitable contributions are treated for tax purposes. Here’s why giving in 2025 is not only impactful but also financially strategic. 

1. Maximize Your Tax Deduction 

In 2026, itemizers will only be able to deduct charitable gifts that exceed 0.5% of their adjusted gross income (AGI)—meaning smaller gifts may no longer be deductible. By giving in 2025, donors can avoid this threshold and deduct the full value of their contributions. 

Additionally, the value of deductions for high-income donors will decrease in 2026. Currently, donors in the top tax bracket receive 37 cents of tax benefit per dollar donated. That drops to 35 cents next year. Giving now ensures you get the maximum tax benefit. 

2. Flexibility with Donor-Advised Funds 

Starting in 2026, the new standard deduction benefit (up to $1,000 for individuals and $2,000 for joint filers) will apply only to cash gifts to public charities—not to donor-advised funds (DAFs). In 2025, donors can still contribute to DAFs and receive full tax benefits, making this an ideal time for front-loading giving into these vehicles for future disbursement. 

3. Simpler Rules, Fewer Restrictions 

The 2026 changes introduce more complexity around itemizing and thresholds. Giving in 2025 allows donors to benefit from simpler, more favorable rules. There’s no AGI floor, no reduced deduction rate, and no exclusions for certain giving vehicles. 

4. Estate Planning Advantages 

While the estate and gift tax exemption will increase in 2026 (to $15 million for individuals and $30 million for joint filers), donors may want to begin planning now. Giving in 2025 allows you to take advantage of current rules and avoid potential legislative shifts that could reduce exemptions in the future. 

For those considering legacy giving, Shatterproof invites you to explore the Brian Mendell Legacy Giving Society — a special community honoring donors who include Shatterproof in their estate plans to ensure lasting impact for generations to come. 

The Bottom Line 

2025 presents a window of opportunity for donors to give generously and strategically. Whether you're making a one-time gift, contributing to a donor-advised fund, or planning your estate, acting now ensures you get the most out of your philanthropy before the rules change. 

If you’d like help crafting a giving strategy or learning more about how these changes affect you, reach out to your financial advisor—or contact Shatterproof. We’re here to help you make the most of your giving and increase your impact.