Although there is still a long way to go until tax season returns, here is something you should be aware of.
The IRS is about to make several changes that will impact specific deductibles.
People will be able to deduct up to $1,000 in cash donations (or $2,000 for joint filers) on charitable cash gifts beginning in 2026, according to CNN.
Tom O. Saben, director of tax content and government relations at the National Association of Tax Professionals, told the outlet that this only applies to direct cash gifts to eligible 501(c)(3) organizations, not donor-advised funds or private foundations.
CNN also states that individuals who itemize their deductions will only be eligible to deduct monetary contributions up to 0.5 percent of their adjusted gross income (AGI): For instance, if one’s adjusted gross income is $100,000, the entire value of the cash present less $500, or 0.5 percent of that $100,000, can be written off.
Clothing, food, home items, and other non-cash contributions are also impacted by this new 0.5 percent floor.
President Donald Trump’s Big Beautiful Bill Act, which amends and builds upon some provisions of the 2017 Tax Cuts and Jobs Act, is responsible for these revisions, according to InvestmentNews.
Fidelity Charitable claims that additional modifications include new deduction caps for itemizers in the highest tax rate. Additionally, corporations will only be able to write off charitable contributions to eligible organizations up to 1% of their total taxable income.
More
politics
-
Trump removes official overseeing jobs data after dismal employment report
-
Pa. lawmaker wants to allow online delivery orders of wine, ready-to-drink beverages
-
Trump delays start date for his new tariffs, again
