Starting this year, several new permanent federal tax rules for charitable gifts go into effect. Many people who have not received a tax benefit for donating may now qualify for one. At the same time, taxpayers who itemize will see their charitable deduction reduce some. The best approach to donating depends on how you file your return, your income and whether you can donate directly from an individual retirement account (IRA).
Under the One Big Beautiful Bill Act of 2025, you may now deduct cash gifts to qualified charities if you take the standard deduction. Most established public charities are qualified but other charitable recipients are not, such as private foundations and donor-advised funds. Cash gifts include currency, checks, electronic transfers and credit card payments.
This new deduction lowers taxable income but does not lower your adjusted gross income (AGI), a figure that affects several items on the tax return and Medicare surcharges. The annual limit for this new deduction is $1,000 for an individual or $2,000 for a married couple filing jointly and applies to all taxpayers regardless of income. Because most households take the standard deduction, this change may give many donors a tax benefit they did not have before.
Because most households take the standard deduction, this change may give many donors a tax benefit they did not have before.
For example, suppose a married couple has $22,200 of itemized deductions before counting donations to charity. The basic standard deduction for joint filers is $32,200 in 2026. Under the old rules, unless this couple’s donation exceeded $10,000 ($32,200-$22,200), the total of their itemized deductions on Schedule A would still be lower than the $32,200 standard deduction they would use if no gift was made. Thus, no tax benefit. However, under the new rules, they may take the $32,200 standard deduction and deduct up to an additional $2,000 for qualifying cash gifts. That knocks a total of $34,200 off their taxable income, $2,000 more than the old rule allowed.
The new rules are less favorable for people who itemize deductions on Schedule A. Beginning in 2026, part of their charitable giving will not be deductible. The excluded amount equals 0.5% of AGI. For someone with $200,000 of AGI, a $10,000 gift would produce only a $9,000 charitable deduction entry on Schedule A. The entry is reduced by ½% of AGI making the first $1,000 of charitable gifts ($200,000 X 1/2%) not deductible.
Further, people in the highest federal tax bracket are also now subject to a reduction in the total amount of itemized deductions allowed. In general, they receive no more than a 35% tax benefit from itemized deductions, even though their top tax rate is 37%.
If you are age 70½ or older and have an eligible IRA, a Qualified Charitable Distribution (QCD) is likely still the most tax-efficient method of donating to charity. With a QCD, money goes directly from your IRA to an eligible charity. The amount is not included in your AGI or taxable income. If you must take required minimum distributions, or RMDs, the QCD can count toward that requirement. The 2026 limit is $111,000 for each eligible IRA owner. Because a QCD keeps the distribution out of AGI, it may also help protect other tax benefits and reduce Medicare surcharges.
The timing of your gifts may now matter more. If you take the standard deduction and cannot make a Qualified Charitable Distribution, you may want to make qualifying cash gifts up to the annual limit. If you itemize, you might combine several years of planned gifts into one year. This can help more of your giving rise above the 0.5%-of-AGI threshold. Before choosing a strategy, consider your expected income, filing status, other itemized deductions and the kind of property you plan to give.
The primary motivation to make a charitable donation for most clients is the desire to benefit causes that are important to them, not a tax break. Because the standard deduction meant many households could not deduct charitable gifts, a lot of people have gotten into the habit of not tracking donations. We recommend clients break that habit and keep good records for every gift. For a cash donation, you generally need a bank record or a written statement from the charity. For any single gift of $250 or more, you need a written acknowledgment from the charity by the applicable tax-filing deadline. People who take the standard deduction should begin saving these records for qualifying gifts made on or after January 1, 2026.
The new law has some twists and turns to it. Add to that a variety of potential giving techniques such as gifting appreciated assets, bunching deductions, or a variety of trusts and the simple desire to donate to help worthy causes can seem complicated. Our clients are generous people that support many causes. Rest assured, we are here to help clients determine their best course of action before the end of the year.
CNBC has named Moisand Fitzgerald Tamayo, LLC (MFT) to its 2026 Financial Advisor 100 list of the top 100 financial advisors in America.
According to CNBC, “We created CNBC’s Financial Advisor 100 in 2019 to recognize the country’s best financial advisors and top financial advisory firms. CNBC accepts no payment for placement…Our team uses data analysis, with data partner AccuPoint Solutions, and editorial review to compile CNBC’s Financial Advisor 100 list. For 2026, CNBC and data partner AccuPoint Solutions started with 41,578 RIAs from the SEC’s regulatory database. That list was culled to 1,015 firms, and finalists completed surveys to confirm key details. CNBC made an editorial review of entries, and AccuPoint used our proprietary weighted criteria to narrow down the list and rank the firms.” (More details)
Plan now to avoid the year end crush
Many tax-related transactions must occur by year-end. While the IRS has a deadline of December 31, due to the sheer volume of requests, most financial institutions will not guarantee a transaction will be completed unless initiated a couple of weeks earlier than that.
Transactions often requested in December include:
- Required Minimum Distributions (RMDs) from retirement accounts and IRAs
- Qualified Charitable Distributions (Only permitted for persons over age 70 ½ and only from IRAs.)
- Transfers or donations of securities
- Sales of securities for “loss harvesting”
- Sales of appreciated securities for “gain harvesting”
- Roth conversions
Waiting until the last minute is not likely to make a significant difference in your tax bill versus the result achieved by executing these transactions earlier. By planning ahead, you can avoid the year end crush. Once you and our advisory team have determined what needs to be done, please proceed with the necessary transactions as soon as possible. If you must wait, Schwab will not guarantee execution before year-end if the request is not properly made before their deadline. Schwab has not yet announced that date but could be as early as December 11, 2026.
News & Notes
Social Security payments and retirement plan contributions are expected to rise: The Social Security Administration has yet to finalize the 2027 cost of living adjustment, but most estimates are for about 3.5%. Contribution limits to retirement plans should also rise. We will have exact figures for you in our January newsletter.
New development with Trump Accounts: On October 1, 2026, the U.S. Treasury announced that more than 60 million American children under age 18 have been automatically enrolled in Trump Accounts but parents must claim the account to activate it. To claim the account, parents or guardians should download the Trump Accounts app. In the app they can review the account information, verify their identity and relationship to the child, and accept the account terms, according to the Treasury. The account must be claimed to enable contributions from family members, friends and employers, and to receive the Treasury Department’s one-time $1,000 seed contribution for children born in 2025-2028. For more details about the accounts and their best use see our August post What Every Parent and Grandparent Needs to Know about Trump Accounts.
Charlie Fitzgerald, CFP® shares his wisdom: Charlie was a panelist for the “Top Advisor Panel” at the FPA of Central Florida meeting on September 11, 2026, at the Country Club of Orlando. The program brought together three respected CFP® professionals for a Q&A covering practice management, client service, and planning best practices. Charlie has been providing financial planning and wealth management services to high net worth individuals, business owners, and retirees for more than 30 years. He has been a national Board Director for the CFP Board of Standards and currently serves as Program Advisor for the University of Florida’s Wealth Management minor.
DJ Hunt, CFP® joins NAPFA Regional Board: DJ Hunt has been selected to serve on the Board of Directors for the Southeast Region of the National Association of Personal Financial Advisors, the nation’s largest membership organization exclusively for fee-only financial planners. DJ will put his more than quarter century of experience as a planner to work as the region’s membership chair.
Ryan Osborne, CFP®, CFA, EA has joined the Class of ’27 of LEAD Brevard. LEAD Brevard provides collaborative leadership training, civic education and connections to leaders of all ages and stages of leadership, empowering them to identify and take action on issues that resonate, positioning them to become positive change agents in the community. Founded in 1986 and governed by a volunteer Board of Directors, LEAD Brevard, Inc. is a 501(c)3 registered nonprofit corporation. The organization’s graduates have completed hundreds of community impact projects led to the appointment of more than 300 new board members at 75+ different nonprofits.
Kevin McDermott, CPA, Tax Manager at Moisand Fitzgerald Tamayo, LLC. will be presenting “Year-End Tax Planning: Strategies and Conversations” to CFP® professionals and other financial professionals from across the region at the FPA of Central Florida meeting on November 13th. Kevin has more than a decade of experience in tax consulting, planning, and compliance. He brings a practitioner’s perspective on the tax questions that come up in your client conversations.
Dan Moisand, CFP® speaks at conference: One reason the CFP® designation is the standard for professional financial planners is it is one of only a handful of the more than 250 financial designations out there that have a disciplinary process and makes their decisions public. Having been at the forefront of the development of the process for over 20 years, our own Dan Moisand was an obvious choice to sit on the October 5th panel, “Demystifying CFP Board Enforcement: How the Code & Standards Are Applied in Real Cases—and How to Avoid Common Missteps.” at CFP Board’s Connections Conference.
Moisand Fitzgerald Tamayo is again a “Fast 50” company: The Orlando Business Journal recognized MFT by including the firm on their 2026 list of the of the 50 fastest growing Central Florida businesses based on growth from 2023-2025.
Important Dates:
November 1: Start of open enrollment for existing Health Insurance Marketplace enrollees
December 7: End of open enrollment for existing Medicare enrollees
December 15:
- End of open enrollment for existing Health Insurance Marketplace enrollees
- Q4 estimated tax payment deadline for C-corporation and multi-member LLCs that elect to be treated as a corporation
Thursday, December 24, 2026 – Sunday, January 3, 2027: The offices of Moisand Fitzgerald Tamayo are closed. As has been our custom for many years, all staff have this time off so they can spend it with their families. Offices will reopen on Monday, January 5, 2026.
January 1:
- Start of General Enrollment Period for Medicare Part A and B
- Start of Open Enrollment Period for Medicare Advantage
January 15:
- Q4 estimated payment deadline for 2026 tax year.
Please remember to call us: When anything significant happens in your life, including changes in your finances, family, or health that could affect your financial plan, please let us know so that we can adapt our planning and portfolio work for you accordingly. Also, if you ever fail to receive a monthly statement for one of the Schwab Institutional accounts under our management, please let us know so we may assure the respective custodian delivers your statements promptly.
Yours truly,
The Team at Moisand Fitzgerald Tamayo, LLC