A helpful look at some important tax changes coming next year

• 1099 Reporting Threshold: Filing threshold for Forms 1099 (including 1099-NEC) moves from $600 to $2,000 starting in January 2026. This will mean that fewer individuals, vendors and contractors will require 1099s. (The threshold will be subject to inflation adjustment after 2026.)

• Charitable Giving: Starting in 2026, non-itemizing taxpayers can take a charitable deduction of up to $1,000 (single) or $2,000 (married filing jointly), if contributions are to a “qualified charity” (not donor advised funds or supporting organizations). This might give non-itemizers an incentive to give. It is important for churches to provide written acknowledgements for donations of $250+ to help donors substantiate their giving.

• Starting in 2026, a 0.5% floor on adjusted gross income (AGI) will be imposed on itemized charitable contribution deductions. This means only donations exceeding the 0.5% threshold will be deductible. For illustration purposes, on $100,000 AGI, the first $500 in donations will not be deductible.

• Because of this new limitation in 2026, some itemizing givers might want to consider “bunching” their charitable contributions in 2025 to avoid the 0.5% limitation.

• Standard Deduction Adjustments: Standard deductions are permanently increased (with inflation indexing going forward). The standard deduction for 2025 is $15,750 (single) and $31,500 (married filing jointly). The standard deduction for 2026 is $16,100 (single) and $32,200 (married filing jointly). Additional standard deductions for those over 65 moves from $1,600 (2025) to $1,650 (2026).

• The bill also provides a new temporary and separate $6,000 bonus deduction for those 65 and older (with some income phase outs) effective for 2025 through 2028. The $6,000 senior deduction is per eligible individual ($12,000 total for a married couple where both spouses qualify). The deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

• “Trump Accounts” for Children: The bill created a new type of tax-advantaged savings account for children in the United States. Trump Accounts can be opened for any U.S. citizen under 18 with a valid social security number. Annual contribution limits are $5,000 per beneficiary. While the contributions are not tax-deductible for contributors, the account will grow tax-deferred. It also provides a $1,000 pilot grant for each newborn from Jan. 1, 2025 through Dec. 31, 2028.