Charitable contributions as tax deductions
About this video
Elena, a single filer with a $48,000 AGI, takes the standard deduction and makes three donations. The video explains the 2026 rule that standard-deduction filers can deduct up to $1,000 (single) of cash gifts to qualified charities, so only her $250 cash gift counts. It then compares itemizing, where gifts count only above 0.5% of AGI, giving just $170.
You'll be able to
- decide which donations qualify for the charitable deduction when someone takes the standard deduction.
- apply the $1,000 (single) / $2,000 (married filing jointly) cap for non-itemizers.
- calculate an itemized charitable deduction after the 0.5% of AGI floor.
- compare the two approaches to see which gives the bigger deduction.
Key words
- Adjusted gross income (AGI)
- Your total income after certain adjustments; used to set limits on some deductions.
- Standard deduction
- A fixed amount you can subtract from income instead of listing your deductions one by one.
- Itemized deduction
- Listing individual deductible expenses, such as charitable gifts, instead of taking the standard deduction.
- 501(c)(3)
- The tax code label for a qualified nonprofit charity that can receive deductible donations.
- Charitable contribution
- A gift of cash or goods to a qualified charity.
Transcript
- [Instructor] We're told that, "Elena's adjusted gross income, AGI, is $48,000. She claims the standard deduction and files as single. Elena makes the following donations this year and receives a receipt for each one." All right. "What is Elena's total deductible charitable contribution?"
Pause this video and have a go at that before we do it together. Okay, so let's do this together. So she's claiming the standard deduction. So, in other years, in previous years, there have been times where, if you claim the standard deduction, you're not itemizing, you wouldn't actually be able to deduct charitable contributions above and beyond that.
But that's changed as of 2026, where, if you are single, you can claim up to $1,000 in charitable contribution deductions, I guess we could say, above and beyond the standard deduction. And if you are filing as married, if you're filing joint, it could be $2,000.
But Elena here is filing as single, so this is the cap. But there's some conditions here. One, it has to be a donation to a legitimate charity, a 501(c)(3). And in order to qualify for this, it has to be cash, which is a little bit different for itemized, itemized, it could be cash or it could be some type of goods that you're donating to a nonprofit.
So this is a situation where she's already taking the standard deduction, and this is above and beyond the standard deduction. So if we look at these things, $250 in cash, so it meets the cash criteria, and to a local community arts center. Let's just assume that this is a true nonprofit, a 501(c)(3).
So this meets the condition, that $250. $50 to a GoFundMe for a friend's medical bills. Well, this is cash, but it's going to a friend, it's not going to a charity. We're assuming that the friend is not a charity, not usually going to happen. So this will not count. Cannot deduct that.
And then $160 worth of household items to Habitat for Humanity. Well, this is a legitimate charity, but this is not cash. So this is household items, so not cash. So, because she has already claimed the standard deduction, and this is kind of, I guess you could say bonus charitable deductions, this is not going to count either.
So the total amount that she is going to, her total deductible charitable contributions, filing in the standard deduction, is $250. If she had done, say, $1,250 here, then she would've only been able to use that first thousand as her deduction. Now, just out of curiosity, some of you might be saying, "All right, you've fixated on, 'She claims the standard deduction.'
What if she claims the itemized deduction?" So what if it was itemized? What would happen then? Well, then she could have claimed the $250, plus, she could have also claimed the $160 worth of household items. Plus $160. And so that would've gotten us to $410. Now, we're almost done, but there's one more thing we have to consider.
The rules, as of 2026, are that the itemized deductions are for deductions above and beyond 0.5% of adjusted gross income, of AGI. So what we really need to do now is we can't just deduct the $410 from our taxable income, we have to see how much more is this than 0.5% of AGI, or 0.5% of $48,000.
So if I were to take 48,000, times 0.005, that's the same thing as 0.5%, this is going to be equal to... I could get our calculator out for this. 48,000 times 0.005 is equal to $240. So for the itemized deduction, we have to think about how much more is 410 than 240.
And so, if we say, 410 minus 240, we actually can only do an itemized deduction of $170. So it'll be $410, $410 minus $240. That comes from this 240. This, right over here, comes from this calculation. Is equal to $170. So, in this world, the $250 is definitely a better deduction.
But let's say that Elena donated much more, maybe had an itemized deduction of $2,500, or even $25,000. And you might say, "Well, that number, this number here, could get higher than 250 quite easily." In fact, if she had just donated, what, another $80, they would've been equivalent.
And if she had donated, say, another $800, then this number would be larger. But you have to remember, with the standard deduction, this is the amount above and beyond the standard deduction, while with the itemized deduction, this is your entire deduction, or at least your entire deduction to charitable giving.
So, in order for the itemized to make sense, this number, right over here, has to get above the standard deduction, and not just the standard deduction, it has to get above the standard deduction plus a few of these extra things that you might be able to deduct above and beyond the standard deduction, when you use the standard deduction.
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