A new charitable giving opportunity in 2026: a tax deduction on cash gifts for donors who take the standard deduction
If you give to charity but take the standard deduction on your tax return, there is an important new opportunity you should know about; and for the first time in years, a good reason to keep track of your cash donations.
Beginning in 2026, new tax laws brought about by the One Big Beautiful Bill Act (OBBBA) allow taxpayers who take the standard deduction to deduct up to $1,000 in cash gifts to qualified charities ($2,000 for married couples filing jointly) in addition to the standard deduction itself. This new deduction, often referred to as the universal charitable deduction, is a permanent change to the taxcode. That means it is not a one-year window, it is available in 2026 and every year going forward.
Why is this such a big deal? Since the standard deduction was nearly doubled in 2018,roughly 9 out of 10 taxpayers take the standard deduction, according to IRS data. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. Under the old rules, if you took the standard deduction, your charitable gifts provided no federal income tax benefit (aside from a temporary $300 deduction during the pandemic years). As a result, most donors had no tax reason to track the $100 gift at a fundraiser, the $50 online donation, or the weekly church offering. Starting in 2026, a portion of those gifts can count for you, but only if you keep track of them and utilize the universal charitable deduction on your 2026 tax return.
There are a few important rules to know. The deduction applies only to cash gifts including checks, credit or debit cards, and online donations. Donations of stock, household goods, and other property do not qualify for this deduction. Additionally,the gift must go directly to a qualified public charity; contributions to donor-advised funds, supporting organizations, and private foundations are not eligible. Finally, you must be able to substantiate your gifts, so keep your records and make sure to keep any written acknowledgements from charities for larger cash gifts.
Let’s look at an example to illustrate the potential impact.
John and Jenny, a married couple in the 24% tax bracket, take the standard deduction and give $50 to $200 at a time to their church, the local food bank, and a scholarship fund throughout the year. In the past, none of those gifts counted towards deductions to reduce their tax bill because they were claiming the standard deduction. In 2026, if they give a total of $2,000 in cash gifts and keep their receipts, they can deduct the full $2,000 on top of their $32,200 standard deduction which results in a tax savings of $480. That is $480 back in their pocket for giving what they were already doing, simply because they kept track of it and utilized the universal charitable deduction.
This new deduction also creates a planning opportunity for donors who give through a donor-advised fund (DAF). Contributions to a DAF do not qualify for the new deduction, and grants made from a DAF are not deductible gifts. So, if you take the standard deduction and do most of your giving through your existing DAF, consider carving out the first $1,000 ($2,000 if married) of your annual giving budget and making those gifts in cash directly to the charities you support. Your charities receive the same support, and you receive a tax benefit you would not otherwise get.
The keypoint to consider is that this benefit only works if you act on it. Starta simple record now (a folder, a spreadsheet, or a note on your phone) and save the receipt or acknowledgment letter every time you give to a qualified charity. Then make sure your tax preparer knows about your cash gifts when you file your 2026 tax return.
If you are among the roughly 90% of taxpayers who take the standard deduction, 2026 is the year your generosity starts paying you back. Every donor can take advantage of at least $1,000 of this new deduction – so give the gifts, keep the receipts, and claim the benefit.
Adam J.Legg, CFP®, CLU®, CAP®
adamlegg@istoadvisors.com
WealthPlanner at ISTO Advisors, LLC
The Catholic Foundation's Professional Advisor Committee Member
