Clarity on the New Charity Rules Which May Benefit Your Freelance Taxes

If you are a freelancer who gives to charity, there’s good news: recent legislation has reshaped how charitable contributions are treated under federal tax law. The Charitable Act (S.317) and the One Big Beautiful Bill (OBBB), both passed in 2025, introduce new opportunities for tax deductions—especially for those who do not itemize—and new limits for high-income donors.

Here is what you need to know to make the most of your giving strategy starting in 2026.

A new deduction for non-itemizers: Under the Charitable Act, taxpayers who take the standard deduction can now claim a charitable deduction for cash donations to qualified charities. This is a significant shift from the previous law, which generally required itemizing to receive any charitable deduction.

Key details:

• Deduction limit: Up to one-third of the standard deduction.
• Eligibility: Applies to cash donations to qualified charities (excluding donor-advised funds and private non-operating foundations).
• Effective Date: Tax years beginning in 2026 and 2027.

If you are a freelancer who typically does not itemize, this change may open the door to meaningful tax savings while helping you support the causes you care about. Essentially, the change is the revival of a popular pandemic-era provision that allowed non-itemizers to deduct up to $300 in charitable donations under the CARES Act.

The OBBBA also reinforces this provision with a fixed deduction cap:

• $1,000 for single filers
• $2,000 for married couples filing jointly

This cap is not indexed for inflation, so it is wise to plan your giving accordingly.

New charitable deduction limits for itemizers:

If you do itemize your deductions, the OBBB introduces two key changes that may affect your tax planning:

• You can only deduct charitable contributions that exceed 0.5% of your adjusted gross income (AGI).
  • Example: If your AGI is $100,000, only donations above $500 are deductible.
• The itemized charitable deductions are now capped at 35 percent of the donation amount for those in the top tax bracket.
  • Example: A $1,000 donation yields a $350 deduction, even if your marginal tax rate is 37%.

These changes are designed to encourage more substantial giving while limiting the tax benefits for token donations and ultra-high earners.

How the new charitable giving tax laws can benefit freelancers:

• Bundle donations: Combine multiple years’ donations into one tax year to exceed the 0.5% AGI threshold and maximize deductions.
• Track AGI carefully: Your AGI now directly affects your deduction eligibility. Consider how business expenses and retirement contributions impact your AGI as well.
• Give before 2026: If you are in a high tax bracket and planning a large donation, consider accelerating your gift to 2025 to take advantage of the current deduction rates.
• Consult a tax professional: These changes add complexity to both charitable giving and may also impact on your charitable giving, Consider consulting a specialist in freelance taxes to help you navigate the new rules and optimize your self-employment tax outcomes.

The Bottom Line

The Charitable Act and OBBB mark a shift toward broader access to charitable deductions while tightening rules for high-income donors. For freelancers, this means new opportunities to give and save—if you plan wisely. Given these and other extensive tax reforms that are now in effect, it is critical to make sure you plan ahead and understand how they will impact your tax situation going forward. Be sure to consult with a tax professional familiar with the new charitable giving and OBBB laws to avoid any unwelcome tax issues next tax season.