While the tax law changes under the One Big Beautiful Bill Act are familiar territory for you, the recent tax season has likely brought these shifts to the forefront for many of your clients. While you have been evaluating these impacts for months, many clients are seeing the real-world results on their returns for the first time, making this an ideal window for proactive planning.
As you guide your clients through this new landscape, here are three technical areas where we can partner with you:
- Responding to Increased Public Interest: With the Wall Street Journal and other mainstream media highlighting donor-advised funds (DAFs) as essential tools for tax savings, your clients may be bringing these questions to you more frequently. The community foundation is here to help you quickly implement DAFs and other giving vehicles to meet their specific charitable goals.
- Managing the New AGI “Floor”: Starting in 2026, a client’s qualified deductions must exceed 0.5% of adjusted gross income to be eligible for a charitable deduction. This threshold makes “bunching” strategies via a donor-advised fund a particularly effective way for clients to front-load contributions into a single tax year.
- Navigating the 35% Deduction Cap: Under the new law, itemized charitable deductions for clients in the 37% federal income tax bracket are now capped at the 35% tax rate. For example, a $10,000 donation would yield a $3,500 tax break rather than $3,700. This added complexity, combined with the new $1,000 “above the line” deduction for non-itemizers ($2,000 for joint filers), makes precise planning essential. Note that this non-itemizer deduction does not apply to non-cash gifts or gifts to DAFs.
Finally, donating appreciated stock held for more than one year remains one of the most tax-efficient strategies for your clients, as it allows them to avoid capital gains tax while maximizing their community impact.
Please reach out to the community foundation anytime. We know these new tax laws add significant complexity to your work, and we are here to support your research and the counsel you provide to your clients. Our team is available to help you navigate these philanthropic nuances, allowing you to focus on strengthening client relationships and growing your practice.
The team at the community foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.
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