Here’s a bit of local trivia: For the past 12 years, a local organization has organized an annual event that brings together over 1,000 organizations in a 24-hour period. Over that 12-year span, these groups raised more than $34 million.
On May 7, 2026, the St. Louis Community Foundation hosted its 12th annual Give STL Day. That day, local nonprofits collected over $3.6 million in small-dollar donations. The St. Louis Metropolitan Area has a proud history of philanthropy. Events like this highlight organizations of all sizes and let donors connect with many options in one place, where they can choose a charity that fits their values. Starting January 1, 2026, changes to the tax code mean many taxpayers will benefit from small-dollar donations, while others will face new thresholds and potential negative tax impacts. Through careful planning, individual and corporate philanthropists can minimize negative tax effects and maximize their impact on chosen charities.
The Good – Non-itemizing Taxpayers Can Deduct Up To $1,000 of Cash Donations
Starting on January 1, 2026, individual taxpayers can deduct up to $1,000 as an above-the-line tax deduction, meaning before Adjusted Gross Income when claiming the standard deduction married taxpayers can deduct up to $2,000 in cash donations. As of May 18, 2026, both Missouri and Illinois comply with federal law in this regard, but in the case of a taxpayer who receives state-level tax credits, they must reduce any federal benefit claimed by the amount of state tax credit received. For instance, if an individual donated $1,000 to an early childhood center in Missouri and receives a 70% Youth Opportunity Program tax credit, the net deductible amount is $300.(1,000*.70 = $700, and $1,000-$700 = a $300 net federal tax deduction after tax credit received) To make a long story short, even something seemingly simple can be complicated when factoring in state level interactions with federal tax law.
The Bad – New Thresholds for Taxpayers Who Itemize
Also starting January 1, 2026, those who itemize will have new thresholds and limits to contend with for cash donations to charity. In general, many taxpayers will have a 0.5% of AGI floor to contend with before their contributions are deductible. Putting this into practice means that if a taxpayer made a $100,000 salary in 2026, the first $500 of charitable donations would not be deductible but would roll forward for five consecutive years to count against the taxpayer’s .5% floor in 2027. Please note, this new floor is generally calculated before any Net Operating Loss carryforward is applied in that year.
In addition to the .5% floor, higher-income taxpayers in the 37% tax bracket will have an overall 35% of AGI limitation on itemized deductions in general. This is yet another layer on the previously existing overall AGI limitations for charitable contributions of 50% for 2026 cash contributions to public charities, 30% for capital gain property like securities, and 20% to non-public charities. Common examples of non-public charities are fraternal organizations, veterans organizations, and private nonoperating foundations. As with all things related to the tax code, there are some exceptions, so make sure you seek advice from a qualified professional before making any large charitable gifts.
The Ugly – New Threshold for C-Corporations
Another limitation, starting January 1, 2026, is that C-Corporations will have both a 1% floor on taxable income for cash charitable contributions and a 10% ceiling on taxable income for deducting cash charitable contributions. To add even greater insult to injury, both the floor and ceiling carry forward on a five-year rolling basis, separately, but work together to effectively limit charitable donations to 9% of taxable income if the corporation exceeds the taxable income limitation.
In Conclusion
The decision to donate to charity can bring a strong sense of satisfaction and connection to the community. Understanding recent tax law changes can help individuals and businesses make informed giving decisions that align with their unique financial situation and long-term goals. As always, please seek tax advice from a qualified professional before making any big decisions.
Alan Dierker, CPA, (adierker@stcpa.com) is a Tax Manager at Schmersahl Treloar. He can be reached at 314.966.2727. Angela Piñon (apinon@stcpa.com) is the Outsourced CFO & Advisory Services Manager at Schmersahl Treloar. She can be reached at 314.966.2727.