One Big Beautiful Bill Impact

The One Big Beautiful Bill Act, signed into law on July 4, 2025, has key tax provisions.

New Deduction

Effective 2025-2028, individuals aged 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current standard deduction. The deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers). To qualify, a taxpayer must turn 65 by the last day of the taxable year. The deduction is available for both itemizing and non-itemizing taxpayers.[1]

Charitable Giving

Starting in 2026, the new legislation will impact charitable giving:

• New deduction for nonitemizers. Nonitemizers can deduct up to $1,000 for gifts to qualified public charities, excluding donor-advised funds.
• New cap on deductions for top earners. Itemizers in the 37% tax bracket will have deductions capped at 35%. Consider giving now instead of waiting.
• New minimum giving threshold. Itemized gifts must exceed 0.5% of your Adjusted Gross Income (AGI) before you can claim a deduction. Some advisors suggest bunching charitable gifts for multiple years into 2025 to avoid this giving floor.
• Extended deduction limit for gifts of cash. The 60%-of-Adjusted Gross Income limit for cash gifts to public charities is now permanent.[2]

[1] https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors

[2] Endowment Development Services, “Seven Strategies for Year-End Giving”