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  Home > Planned Giving > Blog

Blog

Can All Donors Now Save Income Tax with a Charitable Gift?

Posted March 2026

Yes! All donors will now save income tax with a charitable gift. If the gift is made in 2026—but not necessarily if it was made in 2025. To realize tax savings from a gift made in 2025 (other than a gift of IRA assets), it would have been necessary to itemize your deductions when filing your income-tax return and claim the gift as one of those deductions. If you are among the approximately 90% of taxpayers who take the standard deduction, your tax would have been the same whether or not you made the gift.

However, if you make your gift in 2026, a provision in recent tax legislation allowing a limited deduction for nonitemizers will have become effective. Per that provision, those who make charitable gifts but take the standard deduction can deduct an additional $1,000 ($2,000 in the case of a married couple filing jointly.) If the couple is in a 24% tax bracket and gives $2,000, they would reduce their income tax by $480.

Admittedly, this is not a very large sum, but it does reduce the net cost of their gift. Moreover, it can start many young people on a path of giving. Because the significant increase in the standard deduction has reduced the annual number of charitable donors, it is hoped that this subsidy for giving will reverse that trend.

The nonitemizer deduction is likely to appeal to many younger donors who don’t yet have the capacity for larger gifts. At the other end of the age and wealth spectrum are a growing number who are retired, have IRAs, have attained the age of 73 or older, and are taking mandatory distributions. Some of them, having paid off their mortgage, take the standard deduction—but others itemize because of the size of their charitable and other deductions. In either case, there is a tax-advantaged way they can make a charitable gift using their IRA.

Example: James, aged 77, has an IRA, and in 2026 his required minimum distribution (RMD) is $50,000. Since he and his wife Louise do not anticipate needing any portion of this RMD for living expenses and planned travel, he authorizes his IRA administrator to transfer $50,000 to us to support our work. When he and Louise file their joint tax return, they claim their standard deduction in lieu of itemizing their deductions.

Because this is a qualified charitable distribution (QCD), it counts towards James’s RMD. Also, the $50,000 given to us is not included in their taxable income. The result is the same as if they made a gift of $50,000 and then got an offsetting $50,000 deduction. They could still claim the standard deduction, which would reduce the amount of their taxable income.

In Summary: To save income tax from a charitable gift made in 2025, you needed to itemize and claim the gift or make a qualifying gift from your IRA. For gifts made in 2026, you have an additional way to save tax. Even if you don’t itemize, you can claim a deduction of up to $1,000 if single or $2,000 if married and filing jointly. Thus this year practically everyone would save taxes with a charitable gift.

Please don’t hesitate to contact us if we can be of any assistance in helping you meet your personal and charitable objectives in the most tax-wise manner. We’re happy to help!

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The Navy League is an exempt organization, duly qualified under Section 501(c)(3) of the Internal Revenue Code, contributions to which are tax deductible in accordance with federal law.

If your donation is for a scholarship, the Navy League Foundation is a 501(c)(3) organization: Federal Tax ID 31-1677884.

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