Upcoming U.S. Tax Law Changes

Beginning January 1, 2026, revisions to the U.S. tax code will go into effect that could influence how individuals approach their charitable giving. If you’re considering a gift to Franklin, here is a general overview of upcoming changes to consider when discussing plans with your tax professional or financial advisor.

Universal Charitable Deduction (With Limits)
A new provision allows taxpayers who take the standard deduction to still claim a limited charitable deduction—up to $1,000 for individuals or $2,000 for couples filing jointly. This change allows more people to support causes they care about without itemizing.

Note: Contributions made to donor-advised funds will not qualify for this deduction.

Minimum Giving Required for Deduction (Itemizers Only)
From 2026 forward, itemizing donors must contribute at least 0.5% of their AGI to receive any deduction for charitable gifts. If your giving is usually below that threshold, you may want to consider making a more substantial gift in 2025, before the rule changes.

Reduced Deduction Value for High Earners
Taxpayers in the highest income bracket will see a slightly reduced benefit, as the value of a deduction drops from $0.37 to $0.35 per $1 contributed. If you’re in this group, giving before the end of 2025 may yield more favorable tax results.

Tax Brackets Hold Steady
The structure of the current federal income tax brackets will not change, allowing donors to plan based on familiar tax thresholds.

Standard Deduction Amounts in 2025
For tax year 2025, the standard deduction is set at $15,750 for single filers and $31,500 for joint filers. Even if you don’t itemize, strategic giving—such as donating appreciated securities or directing gifts from an IRA if you’re age 70½ or older—can still provide tax advantages.

Cash Contributions and Deductibility
You will still be able to deduct cash gifts totaling up to 60% of your AGI. Consider combining cash donations with gifts of stock or other non-cash assets to increase both impact and tax effectiveness.

Estate and Gift Tax Exemptions Rise
Starting in 2026, individuals can transfer up to $15 million tax-free during their lifetime or at death; couples can transfer up to $30 million. These thresholds may reduce the urgency of estate-tax-driven giving, but many donors find meaningful benefit in giving during their lifetime.

If you’d like to discuss how these changes might affect your giving strategy—or how your support can make the greatest impact at Franklin—we’re here to help. Franklin also recommends working with a trusted professional. Donors should engage their tax professional or financial advisor to make giving plans that align with their values and goals.

Contact:
Nickolas Neibauer ’05
Director of Advancement and Alumni
advancement@fus.edu

Let’s make 2025, and beyond, meaningful investments in Franklin’s future.

Please Note: This article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Tax laws are subject to change, and their application can vary based on individual circumstances. Before making any charitable contributions or financial decisions, please consult a qualified tax professional or financial advisor.