Your Charitable Giving and the New Tax Law
Prepared by Brynn Reynolds Evans ’98 – November 2025
When you donate to a charity like St. Johnsbury Academy, you are choosing to support a cause you believe in and care about. Regardless of changes to tax laws, this will always be the case. For some, tax benefits can help you maximize the impact of your gift and provide helpful tax savings.
With the new tax law (OBBB), signed into law on July 4, 2025, several provisions may impact your charitable giving strategy—with changes to deductions, limits, and benefits—regardless of the level of your donation. The changes take effect in 2026, making this a great time to think about the timing of and type of donations you make to the Academy and other causes you support.
DO YOU TAKE THE STANDARD DEDUCTION?
Starting in 2026, you can deduct total cash donations of up to $1,000 (single filers) or $2,000 (joint filers). Even smaller donations can benefit you.
Note: Gifts must be made to qualified charities, like the Academy. Gifts to Donor-Advised funds are not eligible.
Tip: Make your “year-end” gift to SJA in January 2026.
DO YOU ITEMIZE YOUR TAXES?
Starting in 2026, you can only deduct charitable gifts that are above 0.5% of your Adjusted Gross Income (AGI). Example: Your AGI is $200,000; only charitable giving exceeding $1,000 is deductible.
Cash gifts remain deductible up to 60% of AGI. For high earners, deductions will be capped at 35% of the gift, instead of the current 37% cap.
Tips:
-
Consider accelerating your giving or “bunching” your donations (i.e., combine your planned multi-year gift to SJA into a single gift). Donate before December 31, 2025, to make the most of your tax savings.
-
Donor-Advised Funds make a great option for bunching donations and provide flexibility for giving. You can easily recommend a grant from your DAF to the Academy.
-
Donate appreciated securities like stocks, bonds, and mutual funds to maximize your giving—avoid capital gains taxes and receive a charitable deduction for the fair market value of the security.
ARE YOU OVER 70 ½ AND HAVE AN IRA?
No matter your tax filing status, consider a donation from your IRA through a qualified charitable distribution (QCD).
-
This is a simple, tax-free way to immediately support SJA. Transfer any amount, up to $108,000 annually (adjusted for inflation each year), from your IRA directly to the Academy, and pay no taxes on your gift.
-
Are you over the age of 73? This transfer may count toward your required minimum distribution (RMD).
As you consider the new tax law, always remember that every gift, regardless of size or type, helps optimism thrive on our campus, allowing our students to believe in themselves and their futures. Planning ahead can increase the impact of your generosity for every student who walks on our campus. Thank you!
Do you have questions or want to learn more? Contact Brynn Reynolds Evans ’98 at brynn.evans@stjacademy.org or (802) 751-2129. Information on ways to give can be found at www.stjacademy.org/ways.
This information is provided with the understanding that neither St. Johnsbury Academy nor the authors are providing legal, accounting, or other professional advice or counsel. Please consult your personal counsel about the financial, tax and legal implications of any gift.
