📚 New OBBBA Rules for Charitable Contributions

The One Big Beautiful Bill Act (OBBBA), effective mostly starting in 2026, brings significant changes to charitable giving deductions and credits. Whether you’re a YouTuber, Shopify store owner, online creator, Amazon seller, dentist, filmmaker, or you run a beauty salon, equipment rental company, or trades business, these new rules may affect your giving strategy — and your taxes.

At Velin & Associates, Inc., your trusted CPA for YouTubers, CPA for Shopify Store, CPA for Online Commerce, CPA for Creators, CPA for Filmmakers, CPA for Amazon Business, Amazon Business CPA, CPA for Dental Practice, Dentist CPA, Dental Business CPA, Online Commerce CPA, CPA for TikTokers, CPA for tradespeople, CPA for beauty salons, and CPA for equipment rental companies, we’re here to help you plan ahead.

Tip: If you feel this list is too long for a single paragraph, you can break it into two sentences or feature the keywords in your site footer instead to avoid keyword stuffing.

🔍 Key OBBBA Changes for Charitable Giving

1️⃣ Above-the-Line Deduction for Non-Itemizers
Starting in 2026, individuals who do not itemize can claim an above-the-line deduction for cash donations to qualifying public charities — up to $1,000 (single) or $2,000 (married filing jointly).

2️⃣ 0.5% AGI Floor for Itemizers
Beginning in 2026, if you itemize, you can only deduct charitable contributions that exceed 0.5% of your Adjusted Gross Income (AGI). For example, if your AGI is $500,000, only gifts above $2,500 will be deductible.

3️⃣ New Federal Scholarship Credit
Instead of only claiming a deduction, you may qualify for a new non-refundable federal tax credit of up to $1,700 per year for donations to approved scholarship-granting organizations (SGOs). This credit starts in the 2026 tax year and applies to K–12 scholarships for students from low-income households.

4️⃣ Corporate Giving
For corporations — including S-Corps, LLCs, or C-Corps — there will be a new 1% floor for charitable deductions starting in 2026. Only amounts above 1% of taxable income will be deductible.

5️⃣ 60% AGI Limit Made Permanent
The 60% of AGI limit for cash donations to public charities is now permanent — it will not revert to 50% as it would have under prior law. This helps itemizers who give large amounts continue to deduct more of their cash gifts.

Strategies to Minimize the Impact of the New Floors

To help our clients — from Shopify Store CPAs to CPAs for Dental Practices — here are two practical strategies to consider:

Strategy 1: Give More in 2025 or Use Qualified Charitable Distributions

• Front-load your giving in 2025: If you expect to itemize, consider making larger charitable contributions before the 0.5% AGI floor for individuals (or the 1% floor for businesses) takes effect in 2026. This can help you maximize your deduction under the current, more generous rules.
• Use Qualified Charitable Distributions (QCDs): If you’re age 70½ or older and have an IRA, you can make charitable contributions directly from your IRA using a QCD. A QCD allows you to transfer up to $100,000 per year directly to a qualified charity and exclude that amount from your taxable income. Importantly, QCDs are not subject to the new 0.5% AGI floor, making them an excellent option for retirees who don’t need all of their Required Minimum Distributions (RMDs).

Strategy 2: Claim the New Scholarship Tax Credit

• Instead of relying solely on a deduction, U.S. citizens or residents can claim a new non-refundable charitable contribution credit of up to $1,700 per year for qualified cash donations to certified scholarship-granting organizations.
• For some taxpayers — such as YouTubers, Shopify store owners, or Amazon sellers who often have higher incomes and may hit phaseouts — a credit can be more valuable than a deduction because it directly reduces your tax bill dollar-for-dollar.

Example Scenarios:

✔ As a YouTuber, you may choose to bunch donations into 2025 to avoid the new floor, then switch to the scholarship credit in 2026.

✔ As a Shopify store owner or Amazon Business seller, you might maximize year-end giving now, then plan future gifts using QCDs or the scholarship credit.

✔ As a dentist, you may use QCDs as part of your charitable plan to keep taxable income lower.

✔ As an owner of beauty salons, an equipment rental company, or a trades business, you may coordinate corporate giving and sponsorship expenses to stay above the new corporate floor.

Final Thoughts

The new OBBBA rules make timing and the type of giving more important than ever — especially for entrepreneurs, freelancers, and creatives working with a CPA for Online Commerce, CPA for Creators, or any of the specialized industries we serve.

At Velin & Associates, Inc., we help you plan smart giving strategies to maximize your tax benefits and stay compliant. If you’d like a personalized plan to align with the new OBBBA rules, we’re ready to help.

For more information about our tax planning services, contact us today:

Velin & Associates, Inc.
8159 Santa Monica Blvd, STE 198/200
West Hollywood, CA 90046
📞 323-902-1000
📧 dmitriy@losangelescpa.org

Visit our website to get started!