The One Big Beautiful Bill Act (“the 2025 Act”), introduced several important modifications to increase charitable contribution deductions for individuals. The most impactful change being the reinstatement and permanent expansion of the above-the-line charitable contribution deduction for individuals. In addition, the 2025 Act created an itemized deduction for educator expenses in addition to the existing $300 above-the-line deduction for unreimbursed out-of-pocket classroom expenses.

For decades, the deduction for charitable contributions has incentivized individual taxpayers to support non-profit and community organizations. Under prior law, shaped by the Tax Cuts and Jobs Act (“TCJA”) and temporary provisions of the CARES Act during the pandemic, individual taxpayers could only deduct qualified charitable contributions if they itemized deductions on Schedule A of their returns. However, TCJA’s large increase to the standard deduction for individuals significantly reduced the number of individual taxpayers who itemized deductions, so that they no longer benefited from the charitable deduction on Schedule A. The CARES Act introduced an above-the-line deduction for charitable contributions in cash up to $300 for non-itemized filers, but that deduction expired for tax years after 2021.

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