Remember when your accountant used to ask if you itemized deductions, and you’d stare blankly before mumbling something about “just doing the standard thing”? Well, congratulations—you were part of the 90% club. And thanks to the newly signed “Big Beautiful Bill” (yes, that’s the actual name), your charitable giving is about to get a lot more interesting.
From Tax Exile to Tax Haven
Here’s the deal: Since the Tax Cuts and Jobs Act in 2017 (TCJA) increased the standard deduction, only about 10% of households have itemized deductions, making them ineligible for charitable giving tax deductions. Translation? Nine out of ten Americans were essentially tax outcasts when it came to getting credit for their generosity.
But starting in 2026, everyone gets to play. The new law lets standard deduction filers deduct up to $1,000 ($2,000 for married couples) in charitable contributions. Suddenly, that annual donation to your local animal shelter isn’t just good karma—it’s good tax strategy.
The CARES Act Was Our Crystal Ball
Before you dismiss this as politicians throwing money at problems, consider the evidence. When COVID hit and the CARES Act gave non-itemizers a measly $300 charitable deduction, something magical happened: 47 million households used the non-itemizer charitable deduction for donations totaling around $18 billion. That’s not pocket change—that’s “we can fund a small country’s infrastructure” money.
Even better, charitable gifts of $300 — the cap of the temporary deduction in 2020 — increased by 28 percent on the last day of the year. Apparently, when you give people a tax reason to be generous, they respond with enthusiasm that would make a golden retriever jealous.
Size Matters (In Tax Deductions)
The new $1,000 limit isn’t arbitrary. The Tax Policy Center estimates indicate that over 90 percent of both itemizing and nonitemizing donors make annual contributions above $300. So while the CARES Act captured some giving behavior, this new provision captures much more of what people actually donate.
The Bottom Line
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. That’s a troubling trend that deserves more than thoughts and prayers.
By making charitable deductions accessible to everyone, the Big Beautiful Bill doesn’t just expand the tax code—it expands the circle of Americans who have a financial incentive to support causes they care about. And in a world where nonprofits are struggling more than a GPS in a tunnel, that’s genuinely beautiful legislation (except for many other aspects of the BBB bill).
Photo by Joseph Corl on Unsplash
