Senate version of Trump's budget bill includes a new tax break worth up to $2,000—around 90% of filers could take advantage
Congress will soon begin a reconciliation process for the so-called One Big Beautiful Bill Act — President Donald Trump's sweeping tax reform and spending bill, which Republicans hope to bring to the President's desk by July 4.
The bill promises continuity for taxpayers by permanently extending the cuts from the 2017 Tax Cuts and Jobs Act as well as a raft of new cuts, including breaks for tipped and overtime income.
Both the House and Senate versions of the bill also include a throwback: an above-the-line deduction on charitable contributions.
The House version allows taxpayers who don't itemize to deduct $150 ($300 for joint filers) in charitable contributions from their taxable income through 2028 — a tax rule you may remember from a similar provision of the CARES Act, which expired in 2021.
The Senate version is even more generous, with permanent deductions of up to $1,000 for single filers and $2,000 for married couples filing jointly.
"This could provide some tax savings for folks," says Erica York, vice president of federal tax policy at the Tax Foundation. "That could be something unexpected if you're not currently deducting charitable giving."
Most people don't deduct charitable contributions — and it's not because they're not generous or don't want a tax break. Other than under the Covid-19 relief bill, taxpayers generally have had to itemize deductions in order to get a break for charitable giving.
For most people, that doesn't make sense. Some 9 in 10 taxpayers take the standard deduction, which in 2025 is $15,000 for singles and $30,000 for joint filers. You'd typically only itemize if the sum of your deductions would save you more money than just taking the standard deduction.
In short, the legislation currently bouncing around Congress would, at least temporarily, allow anyone who donates to charity to get a tax break — not just the mega-philanthropists among us.
Because these deductions reduce your taxable income, they're the most beneficial for people in the highest tax brackets. A $1,000 deduction from income is effectively worth $100 to someone in the 10% tax bracket. The same deduction is worth $350 to someone in the 35% bracket.
Should some version of the provision become law, you'll still have to follow the IRS' rules on charitable giving. Donations must be made to qualifying charitable organizations — donations to political campaigns, crowdfunding efforts and, in the case of the proposed tax break, donor-advised funds won't be eligible.
Before you make a donation you plan on deducting, check the IRS' search tool to make sure the organization is tax-exempt. And be sure to get a receipt for your donation; the IRS generally requires written acknowledgement of any donation in excess of $250.
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