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The One Big Beautiful Bill Act and Its Impact on You
A new tax law, in the United States, called the One Big Beautiful Bill Act, is bringing some changes that may impact how you plan your charitable contributions starting in 2026. The good news? Whether you itemize your tax return or not, there are still smart and effective ways to support the IEEE Foundation and reduce your taxes.
Let’s walk through what the new law means for you:
Good News for Donors Who Don’t Itemize
If you typically take the standard deduction rather than itemizing, there’s a great new incentive coming your way. Beginning in 2026, you’ll be able to deduct up to:
- US$1,000 in charitable contributions (individual filers)
- US$2,000 if you file jointly as a couple
That means you can donate to the IEEE Foundation all while potentially lowering your taxable income, even without itemizing. Your contributions help facilitate impactful IEEE initiatives that deliver measurable benefits to the world, helping the programs you believe in thrive.
Modest Changes for Donors Who Do Itemize
If you itemize your deductions, there are two changes to be aware of—both of which are relatively modest and depend on your personal situation:
- A New “Floor” for Deductions:
Starting in 2026, your charitable gifts will be deductible after they exceed 0.5% of your Adjusted Gross Income (AGI).
- For example, if your AGI is US$100,000, the first US$500 of your charitable contributions won’t be deductible—but everything beyond that will still count.
- Cap on Deductions for High-Income Donors:
If you’re in the top income tax bracket (37%), your charitable deduction will now provide tax savings at a maximum of 35%, reducing the value of your deduction by just 2¢ per dollar. While the deduction will still reduce your taxable income, this slight cap may affect your overall tax savings.
Estate Tax Update: A Window of Opportunity
In addition to changes that affect annual charitable giving, the One Big Beautiful Bill Act will also have a significant impact on estate planning, particularly for those considering a legacy gift to the IEEE Foundation.
The estate tax exemption, which had been set to revert to a lower amount in 2026, was made permanent and increased to US$15,000,000 per individual in 2026 and will be indexed for inflation starting in 2027.
What this means for you: Those who exceed the threshold still need to contemplate and implement advanced planning to reduce estate taxes and to use exemptions to their fullest, particularly if they are concerned about the law being changed in a few years. Individuals with a net worth well below those figures still need well-thought-out living trusts and related estate planning documents. Individuals whose net worth is near those thresholds or who expect to exceed them should also consider further estate planning to stay ahead of the curve.
No matter how these changes apply to you, we are here to help you navigate them and make the most of your giving. Your support powers everything we do, from advancing technology that improves lives to inspiring the next generation of engineers and innovators.
We look forward to working together to ensure your gifts to the IEEE Foundation continue to make a lasting difference and work to your financial advantage.
About the IEEE Goldsmith Legacy League
The IEEE Goldsmith Legacy League celebrates the elite group of legacy-giving donors building tomorrow by ensuring that IEEE programs can turn their ambitions into impact. These “Forever Generous” donors are recognized for including the IEEE Foundation in their estate plans. The Foundation team would be honored to assist with finding the right way for you to integrate IEEE into your estate plan and join the IEEE Goldsmith Legacy League.
This article is intended to provide general gift-planning information. The IEEE Foundation is not qualified to provide specific legal, tax, or investment advice, and this publication should not be looked to or relied upon as a source for such advice. Consult with your own legal and financial advisors before making any gift.
