If you’re a freelancer who provides to charity, there’s excellent news: current laws has reshaped how charitable contributions are handled beneath federal tax regulation. The Charitable Act (S.317) and the One Huge Stunning Invoice (OBBB), each handed in 2025, introduce new alternatives for tax deductions—particularly for individuals who don’t itemize—and new limits for high-income donors.
Here’s what that you must know to benefit from your giving technique beginning in 2026.
A brand new deduction for non-itemizers: Beneath the Charitable Act, taxpayers who take the usual deduction can now declare a charitable deduction for money donations to certified charities. This can be a important shift from the earlier regulation, which usually required itemizing to obtain any charitable deduction.
Key particulars:
- Deduction restrict: As much as one-third of the usual deduction.
- Eligibility: Applies to money donations to certified charities (excluding donor-advised funds and personal non-operating foundations).
- Efficient Date: Tax years starting in 2026 and 2027.
If you’re a freelancer who sometimes doesn’t itemize, this modification could open the door to significant tax financial savings whereas serving to you assist the causes you care about. Primarily, the change is the revival of a preferred pandemic-era provision that allowed non-itemizers to deduct as much as $300 in charitable donations beneath the CARES Act.
The OBBBA additionally reinforces this provision with a set deduction cap:
- $1,000 for single filers
- $2,000 for married {couples} submitting collectively
This cover will not be listed for inflation, so it’s clever to plan your giving accordingly.
New charitable deduction limits for itemizers:
Should you do itemize your deductions, the OBBB introduces two key adjustments which will have an effect on your tax planning:
- You possibly can solely deduct charitable contributions that exceed 0.5% of your adjusted gross earnings (AGI).
- Instance: In case your AGI is $100,000, solely donations above $500 are deductible.
- The itemized charitable deductions at the moment are capped at 35 p.c of the donation quantity for these within the prime tax bracket.
- Instance: A $1,000 donation yields a $350 deduction, even when your marginal tax charge is 37%.
These adjustments are designed to encourage extra substantial giving whereas limiting the tax advantages for token donations and ultra-high earners.
How the brand new charitable giving tax legal guidelines can profit freelancers:
- Bundle donations: Mix a number of years’ donations into one tax yr to exceed the 0.5% AGI threshold and maximize deductions.
- Observe AGI fastidiously: Your AGI now straight impacts your deduction eligibility. Take into account how enterprise bills and retirement contributions affect your AGI as effectively.
- Give earlier than 2026: If you’re in a excessive tax bracket and planning a big donation, contemplate accelerating your reward to 2025 to make the most of the present deduction charges.
- Seek the advice of a tax skilled: These adjustments add complexity to each charitable giving and might also affect in your charitable giving, Take into account consulting a specialist in freelance taxes that will help you navigate the brand new guidelines and optimize your self-employment tax outcomes.
The Backside Line
The Charitable Act and OBBB mark a shift towards broader entry to charitable deductions whereas tightening guidelines for high-income donors. For freelancers, this implies new alternatives to present and save—in the event you plan properly. Given these and different in depth tax reforms that at the moment are in impact, it’s crucial to be sure to plan forward and perceive how they are going to affect your tax scenario going ahead. You should definitely seek the advice of with a tax skilled accustomed to the brand new charitable giving and OBBB legal guidelines to keep away from any unwelcome tax points subsequent tax season.
