Corporations and High Net-Worth Donors
The OBBB establishes a 1% floor on corporate charitable deductions, as well as a 0.5% floor on charitable deductions against adjusted gross income (AGI) for individual itemizers. The market is interpreting these floors to mean that deductions can only be taken on contributions made after the respective thresholds are met, Phoenix told Checkpoint. For individuals in the highest tax bracket (37%), the value of their deduction will also be slightly reduced, from 37 cents to 35 cents per dollar contributed, he added.
Given these changes and lingering uncertainty about the details, Phoenix’s advice to corporations and individual itemizers is to act before the new provisions take effect in 2026. The primary strategy for both of these types of donors is to accelerate, or “bunch,” their giving into 2025, he explained.
To dig deeper, visit the original article on the Thomson Reuters blog.