OBBBA Exemptions: Estate and Gift Tax Exemption + Charitable Contribution Changes
The One Big Beautiful Bill Act (OBBBA) is a wide-reaching piece of legislation signed into law in July 2025. This comprehensive package covers a broad range of topics including tax provisions. Although many aspects of the law are still in the process of being implemented, many of its tax provisions took effect immediately and will impact your 2026 tax planning.
What does this mean for you?
- Estate and Gift Tax Exemption: The lifetime estate and gift tax exemption amount has increased to $15 million per person starting in 2026. This was made permanent and will be adjusted for inflation.
- Above-the-line Charitable Contribution: This new charitable deduction provides an opportunity for taxpayers to receive a tax benefit for donations even when they take the standard deduction. Individuals who do not itemize will now be able to deduct up to $2,000 (married filing jointly) or $1,000 (all others) for cash gifts to qualified 501(c)(3) public charities which is treated as a reduction of gross income to calculate adjusted gross income.
- Charitable Deduction Floor for Those Who Itemize: OBBBA introduced a limit for taxpayers that itemize by providing a deduction only for the amount of contributions that exceed .5% of the taxpayer’s adjusted gross income . This applies to cash contributions and goes into effect 1/1/2026.
Click HERE for more info on the OBBBA
Contact your CPA for additional info on how the OBBBA will affect your 2025 tax filings.
