October 21, 2026
The One Big Beautiful Bill (OBBB) Act, signed into law on July 4, 2025, rewrote several rules that affect how you give and how you pass wealth to the next generation. Most provisions took effect in 2026, so 2027 will be the first year many taxpayers plan around them from the start.
If you itemize your deductions, the first slice of your giving no longer counts. Starting in 2026, your deduction shrinks by 0.5% of your adjusted gross income (AGI), which is roughly your total income after certain adjustments. For example, if your AGI is $200,000, your first $1,000 of gifts each year earns no deduction.
High earners get a slightly smaller benefit. Taxpayers in the top 37% bracket now save at most 35 cents per dollar donated.
If you take the standard deduction, you now get something too. You can deduct up to $1,000 of gifts ($2,000 for married couples) without itemizing.
A new credit starts in 2027. You can claim up to $1,700 per year for gifts to organizations that fund private-school scholarships. Each state decides whether to take part, so we will confirm New York’s status before you count on it.
If you are 70½ or older, you can send money directly from your IRA to a charity. This is called a qualified charitable distribution (QCD). The amount never counts as taxable income. The 2026 limit is $111,000 per person, and it rises with inflation. The IRS has not yet announced the 2027 amount.
A QCD can also cover some or all of your required minimum distribution, the amount the IRS makes you withdraw each year. Because the money never shows up in your income, it avoids the new 0.5% reduction too. Keep in mind that QCDs must go to qualifying charities directly, not to donor-advised funds.
The OBBB has permanently set the federal estate and gift tax exemption at $15 million per individual, indexed for inflation. That equals $30 million per married couple, with inflation adjustments beginning in 2027.
You can also give up to $19,000 per person each year without any paperwork or use of your lifetime limit. Analysts expect that to rise to $20,000 in 2027.
New York state, however, has an estate tax that sits well below the federal exemption and includes a “cliff” that can tax the whole estate if you exceed the threshold slightly. A federal exemption this high does not remove that exposure.
Tax law keeps moving, and the IRS will release the official 2027 inflation adjustments soon. Contact our team to review how these rules fit your giving goals and your estate plan.
