The 2026 charitable giving changes high earners in Raleigh need to plan around

You give to your church, your alma mater, the causes you have backed for years. You itemize. And starting this year, those same gifts produce a smaller tax benefit than they did in 2025. You did not change a thing about your giving. The rules changed underneath you.

The One Big Beautiful Bill Act made headlines for the estate tax exemption, which is now a permanent $15 million per person. That change got most of the attention. Far less went to what the same law did to charitable deductions, and for high earners, that is the part that actually changes how you should write your checks in 2026.

Three changes took effect this year. Two of them cost you money. One is a small consolation prize built for people who do not itemize, which probably is not you.

What changed for itemizers in 2026

Two new limits now sit between your gift and your deduction.

The first is a floor. You can deduct charitable contributions only to the extent they exceed 0.5 percent of your adjusted gross income, so the first slice of everything you give is no longer deductible at all. On an AGI of $500,000, that floor is $2,500. Give $25,000 and you deduct $22,500, not the full amount.

The second is a cap. If you sit in the top 37 percent bracket, the tax benefit of your itemized deductions, charitable gifts included, is now capped at 35 cents on the dollar. Every dollar you deduct saves you 35 cents in tax, not 37. Let me be very clear with you about why this one stings: it lands on top of the floor, so a top-bracket donor loses ground twice on the same gift.

Here is what that looks like in practice. Say your AGI is $800,000, which puts your taxable income in the top 37 percent bracket, and you give $40,000 to a public charity this year. The floor strips $4,000 off your deduction, leaving $36,000. The cap then values that $36,000 at 35 percent instead of 37, which trims roughly another $720 off your benefit. Put the two hits together and that single gift is worth about $2,200 less than the same gift would have been in 2025. And quite candidly, for donors who give large gifts every single year, those reductions stack up fast across a decade of giving.

The consolation prize you probably can't use

There is one new benefit, and it runs the other direction. Taxpayers who take the standard deduction can now deduct up to $1,000, or $2,000 for a married couple filing jointly, in cash gifts to qualifying public charities, without itemizing at all. It is permanent, and it is a genuine win for everyday donors.

But it excludes gifts to donor-advised funds, and if you are a high earner reading this, you almost certainly itemize. Here is what most high earners miss about this provision: it was not written for you. Your planning lives entirely on the itemizer side of the ledger, where the floor and the cap apply.

Why bunching matters more now than it did last year

The floor changes the math on how often you give, not just how much, so let me walk you through a quick comparison.

Suppose your AGI runs around $500,000, which puts your annual floor near $2,500. You plan to give $10,000 a year for three years. Spread out that way, each year loses $2,500 to the floor, so you deduct $7,500 annually and $22,500 across the three years. Now bunch all $30,000 into a single year instead. You cross the floor once, deduct $27,500, and you clear the standard deduction in that year, so the rest of your itemized deductions count too.

The math is pretty simple: same generosity, $5,000 more in deductions, plus a cleaner standard-deduction year on either side. A donor-advised fund is the tool that makes this work without forcing your charities to wait. You move three years of giving into the fund in one year, take the deduction now, and grant the money out to your church or nonprofit on your normal schedule.

Two ways to soften the new limits

Two strategies change the picture, and they work differently. One sidesteps the new limits completely. The other reshapes how they land on a large, appreciated gift.

If you are 70 and a half or older, a qualified charitable distribution lets you send money straight from your IRA to a charity. It never shows up as income and it never lands on Schedule A, so neither the floor nor the cap touches it, and it can count toward your required minimum distribution. For retirees sitting on large IRAs, this is often the single most efficient way to give a dollar.

A charitable remainder trust is the other option worth a serious look if you are giving at scale or holding highly appreciated stock or real estate. You move the asset into the trust, draw income from it for life or a term of years, and the remainder goes to charity. The upfront income tax deduction you receive is still a charitable deduction, so the floor and the cap can still reach it. What the trust changes is the larger picture: it spreads your capital gains, pairs that deduction with a long-term income stream, and can leave you far more tax-efficient on a big appreciated asset than writing a check ever would.

What to settle before you write your 2026 checks

A few decisions are worth making now, in June, while you still have six months of runway:

•       Decide whether this is a bunching year or a skip year, rather than giving on autopilot.

•       Open or fund a donor-advised fund if you plan to bunch.

•       If you are over 70 and a half, route gifts through your IRA instead of your checkbook.

•       Run the numbers on a charitable trust if you are holding appreciated stock or real estate.

I want to strongly encourage you to make these calls before December rather than in the last week of the year, when your options narrow and the better vehicles take real time to set up. The donors who plan deliberately will keep far more of their giving's value than the ones who write the same checks they always have.

Where this leaves you

None of this means you should give less. It means the structure around your giving matters more than it did a year ago. This is exactly the kind of planning we build into estate planning for high income earners in Raleigh, where your giving, your taxes, and your long-term plan all pull on the same rope. I want to strongly encourage you to map your 2026 giving early in the year rather than late. If we can be of assistance to you, please reach out to us at 919-647-9599 or schedule a discovery call.

Disclaimer

This article is for educational purposes only and does not constitute legal or tax advice. The information provided is general in nature and may not apply to your specific situation. Charitable, estate, and tax planning involve complex considerations that vary based on individual circumstances, income, and the assets involved. Tax provisions are subject to change and to future Treasury and IRS guidance. For advice tailored to your circumstances, please schedule a consultation with a qualified attorney or tax professional.