The 0.5% AGI Deduction Floor

Charitable giving rules are changing in 2026, and many business owners have no idea their tax deductions could quietly shrink.

The One Big Beautiful Bill Act introduced new limits, floors, and deduction caps that change how charitable donations work depending on your income level and whether you itemize deductions. In some cases, you could donate the exact same amount and receive a smaller tax benefit than before.

Today we're breaking down the new charitable giving tax rules, who wins under the new system, who loses, and how smart business owners can still give generously while protecting their tax strategy.

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Chapters

(01:00) Charity First, Strategy Second
Giving should start with the causes you care about before considering tax benefits.

(02:00) Current Deduction Rules and AGI Limits
How itemized deductions work and the limits for cash, appreciated assets, and non-cash donations.

(04:20) New Deduction for Non-Itemizers
Starting in 2026, standard deduction filers can deduct up to $1,000 (single) or $2,000 (married) in cash donations.

(07:00) The New 0.5% AGI Deduction Floor
Itemized charitable deductions only apply to donations above 0.5% of AGI.

(09:40) Deduction Cap for High-Income Earners
Taxpayers in the top bracket now receive a maximum 35% tax benefit from itemized deductions.

(11:00) How Business Owners Handle Charitable Giving
Most charitable contributions flow through to the owner’s personal tax return.

(13:30) Planning Strategy: Bunching Donations
Combining multiple years of giving into one year may increase deductions.

(16:00) Planning Strategy: Qualified Charitable Distributions
Taxpayers age 70½ and older can donate from an IRA to bypass itemized deduction limits.

(17:00) Key Takeaways
Charitable giving rules are more complex in 2026. Strategic planning helps preserve the tax benefits.

Podcast Host:

Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings Podcast
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🎙 ABOUT THE PODCAST

The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.