The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025.  

The OBBBA, with nearly 900 pages of provisions, reshapes policy across major sectors of the U.S. economy. Included in the OBBBA are several provisions that impact philanthropy. Three major takeaways may be of interest as you navigate charitable planning opportunities with your clients.  

Insight #1: Standard deduction goes higher 

What’s in the OBBBA? 

The new law makes permanent the standard deduction increases under the Tax Cuts and Jobs Act of 2017 (TCJA), increasing the standard deduction for 2025 to $15,750 for single filers and $31,500 to taxpayers who are married and filing jointly. The new law also expands the “bonus” deduction for taxpayers 65 and older through 2028. 

Under the OBBBA:

• Minimum threshold: Taxpayers now only receive tax benefits for charitable giving that exceeds 0.5% of their adjusted gross income. For example, if a client’s AGI is $200,000, they can only deduct giving in excess of $1,000. 

• Benefit reduction: The deduction rate for those in the top income bracket drops from $0.37 to $0.35 per dollar donated, capping the tax benefit at 35%. This means taxpayers in this bracket will receive a $350 deduction for every $1,000 donated instead of the previous $370. Note: the current rule allowing a full deduction for individuals taxed at the 37% rate still applies for 2025. 

What does this mean for charitable giving? 

With even fewer taxpayers eligible to itemize, and deductions capped for high-income earners, we’re likely to see a continuation of the chilling effect on charitable giving that occurred in the wake of the TCJA. 

What can you do? 

Our community needs those regular charitable givers now more than ever. You know that many of your clients do not give to charity solely to secure a tax deduction, so continue to emphasize those values-based motivations in your conversations with clients. There are so many factors that motivate charitable giving, and philanthropy is an important priority for many families.  

Insight #2: Deduction for non-itemizers 

What’s in the OBBBA? 

The new law includes a provision, effective after 2025, allowing non-itemizers to take a charitable deduction of $1,000 for single filers and $2,000 for taxpayers who are married and filing jointly. As has been the case in the past, gifts to donor-advised funds are not eligible. Unlike a previous similar provision, this law is not set to sunset.  

What does this mean for charitable giving? 

After the TCJA went into effect, households that itemize deductions dropped to under 10%. Parallel to this trend, the number of U.S. adults who give to charity in any given year has dropped over the last 20 years from nearly two-thirds to less than half, according to some studies. Against this backdrop, the OBBBA’s deduction for non-itemizers has the potential to re-motivate charitable giving among a significant number of households.  

What can you do? 

Now is the time for your charitably inclined clients to take a serious look at their giving plans to support the causes they care about over the years ahead, especially if they are early in their career and not yet itemizing deductions. This could be a great opportunity to talk about charitable giving with your clients who don’t itemize; a $1,000 or $2,000 deduction could be just the motivation they need to begin a journey of philanthropy. 

Insight #3: No sunsetting estate tax exemption 

What’s in the OBBBA? 

For affluent taxpayers updating financial and estate plans, and for the attorneys, CPAs, and wealth managers advising them, the last couple of years have been a roller coaster because of the looming possibility that the TCJA’s increase to the estate tax exemption would sunset at the end of 2025. 

Finally, there is clarity: Under the OBBBA, the sunset will not occur. The new law makes permanent the increase in the unified credit and generation-skipping transfer tax exemption threshold. 

• For 2025, the exemption is nearly $14 million for individuals and just under $28 million for couples.  
• Starting Jan. 1, 2026, the estate tax exemption will increase to $15 million for individuals and $30 million for couples filing jointly and indexed for inflation beginning in 2027. 

What does this mean for charitable giving? 

Purely estate tax-based incentives to give to charity continue to apply only to the ultra-wealthy, likely resulting in a continuation of the taxpayer behavior triggered by the TCJA. In other words, most people will give to charity during their lifetimes and in their estates for reasons other than a tax deduction. 

What can you do? 

There is no guarantee that the estate tax exemption will stay high forever. As families work with their tax and estate planning advisors, many are viewing the next two years as an important window to plan ahead. The upshot of the new law is that high net-worth taxpayers now have more time to thoughtfully consider estate planning strategies, including charitable giving.  

As you help your clients build personalized charitable giving plans that align with their values in this shifting landscape, our team is ready to answer your questions and serve as your resource! 

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.