How the One Big Beautiful Bill Impacts Your Philanthropy

Now that the One Big Beautiful Bill (H.R.1) has been signed into law, it is important to understand the effects on philanthropy, particularly on your giving goals and objectives. One thing has not changed: Philanthropy continues to be the best way for individuals, corporations, foundations, nonprofits, and others to ensure Arizona thrives.

The Arizona Community Foundation has been your trusted partner for nearly 50 years and will continue well into the future. To understand how the bill may or may not change your philanthropic objectives, below is a brief synopsis:

Increased standard tax deduction: The standard deduction increases from the Tax Cuts and Jobs Act of 2017 (TCJA) were made permanent, which increases the standard deduction for the 2025 tax year to $15,750 for single filers and $31,500 for taxpayers who are married and filing jointly. The new law also expands the “bonus” deduction for taxpayers 65 and older through 2028.

In addition, individuals who itemize can take charitable deductions only to the extent that charitable deductions exceed 0.5% of adjusted gross income; taxpayers in the top bracket can claim a 35% tax deduction for charitable gifts instead of the 37% that would otherwise apply to their income tax rate. The final bill permanently extends the 60% of adjusted gross income contribution limitation for cash gifts to qualifying charities.

• Planning Tip: You may want to accelerate your giving in 2025 to avoid the increasing limitations after this year.

Non-itemizers can take a charitable deduction. After 2025, a charitable deduction of $1,000 for single filers and $2,000 for married taxpayers filing jointly will be allowed. As before, this does not include gifts to donor advised funds, but may include contributions to scholarship funds, unrestricted gifts, etc.

• Planning Tip: Your ACF relationship manager can help ensure you continue to meet your philanthropic goals. We can work alongside your professional advisor so you get more out of giving back.

Estate tax exception remains in place: The new law makes permanent the increase in the unified credit and generation-skipping transfer tax exemption threshold. For 2025, that will be $13.99 million for single filers and $27.98 million for married filing jointly. Next year, these amounts shift to $15 million and $30 million, respectively.

• Planning Tip: There is no guarantee that the estate tax exemption will stay at this level forever. Now is the time to work with your relationship manager and professional advisor to review your charitable giving and estate planning strategy.

This is a brief summary of the implications for donors, nonprofits, and others. More detailed information is available from the Council on Foundations or through your tax or legal professional.

*This article is not intended as tax or legal advice. Please consult your tax professional.