Cardinal Point Wealth Management Brings Awareness to U.S. Charitable Giving Tax Rules Amid OBBBA Changes

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Toronto, ON - September 17, 2025 - Cardinal Point Wealth Management is bringing awareness to changes in U.S. charitable giving tax rules, particularly those under the Omnibus Budget Bill Amendments (OBBBA). With provisions taking effect in 2026, individuals and families may need to reassess how they approach charitable donations for tax purposes.

Overview of Charitable Giving Deductions

There are five primary ways to deduct charitable donations on a U.S. tax return:

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Charitable donation deduction in addition to the standard deduction

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Itemized deductions

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Qualified charitable distributions (QCDs) from an IRA

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Contributions to a Donor Advised Fund (DAF)

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Contributions to a Charitable Remainder Trust (CRAT)

The first two are usually handled directly by taxpayers, while the latter three require custodians.

What Qualifies as a Deductible Gift

For a contribution to be deductible, it must be a completed gift. Eligible donations include cash, appreciated securities, new goods, and used property in serviceable condition. Out-of-pocket expenses such as mileage incurred for charitable work also qualify.

Time and expertise donated through volunteering cannot be deducted. Purchases of raffle or lottery tickets do not qualify. When donors receive something of value in return-such as dinner tickets-the fair market value of the benefit must be subtracted from the deductible amount.

Crowdfunding donations, such as through GoFundMe, are not deductible unless the recipient is a qualified 501(c)(3) or similar recognized charity. Political campaigns are excluded. Donors must ensure they receive receipts at the time of giving.

Cross-Border Rules

Qualified organizations are typically U.S.-based, but certain Canadian, Mexican, and Israeli charities also qualify if the donor has income sourced from those countries. Deductions are subject to country-specific AGI limits: Canadian and Mexican donations follow the same limits as U.S. charities, while Israeli donations are capped at 25% of income from Israeli sources.

Limits and Thresholds

Contribution limits vary by type of donation and recipient:

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Cash donations to public charities: up to 60% of AGI

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Non-cash property donations: up to 30% of AGI

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Private foundations: 20-30% of AGI

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Conservation property donations by farmers or ranchers: up to 100% of AGI

Unused deductions may be carried forward for five years (15 for conservation property).

Beginning in 2026, OBBBA introduces a 0.5% of AGI threshold for itemized charitable contributions, similar to the 7.5% threshold for medical expenses.

Five Deduction Pathways

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Additional Deduction for Non-Itemizers - Returning in 2026, up to $2,000 for joint filers and $1,000 for others.

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Itemized Deductions - Best suited for significant charitable giving or large SALT/medical expenses. From 2026, contributions face a 0.5% AGI floor and a 35% cap on tax benefit.

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Qualified Charitable Distributions (QCDs) - Taxpayers 70 1/2 + may transfer up to $108,000 (2025) annually from an IRA directly to a charity. QCDs reduce AGI and avoid the new threshold.

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Donor Advised Funds (DAFs) - Allow deductions in the contribution year while enabling funds to be distributed over time.

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Charitable Remainder Trusts (CRTs) - Provide upfront deductions while paying income to beneficiaries before the remainder passes to charity.

Gift Tax Considerations

Charitable contributions do not reduce the lifetime gift and estate tax exemption. Donations should still be reported on gift tax returns, but marked as charitable and excluded.

Key Takeaways

Modest donors may benefit most from the reinstated non-itemizer deduction. Those with larger giving plans may wish to accelerate donations into 2025, before the 0.5% threshold takes effect. For older taxpayers, QCDs can be a tax-efficient option to satisfy required IRA distributions while reducing taxable income.

About Cardinal Point Wealth Management

Cardinal Point Wealth Management [https://cardinalpointwealth.com/our-story/] is a cross-border wealth management [https://cardinalpointwealth.com/cross-border-financial-and-tax-planning/moving-to-canada-from-the-u-s/] firm with offices in the United States and Canada. The firm provides comprehensive financial planning, investment management, and tax guidance tailored to individuals and families with assets and interests in both countries. Cardinal Point specializes in navigating complex tax rules and cross-border regulations to help clients make informed financial decisions.

Disclaimer: This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
Media Contact
Company Name: Cardinal Point Wealth Management, ULC
Contact Person: Kris Rossignoli, Senior Private Wealth Manager
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