2026 Mid-Year Tax Update

There are a couple of recent tax law changes that you may want to take advantage of before the end of the year. Most of the provisions of the One Big Beautiful Bill (OBBB) took effect last year, but some others didn’t start until this year.

Charitable Contributions

Before 2026, taxpayers could only deduct charitable contributions if they itemized deductions on Schedule A. Most people who don’t own homes take the Standard Deduction and therefore weren’t able to take advantage of this deduction – until now.

But beginning in 2026, you can deduct up to $1,000 in cash donations to charities if you don’t itemize! For a married couple filing a joint return, the limit is $2,000. This is in addition to the Standard Deduction.

Note that this applies only to monetary donations to charities, not donations of items. Also keep in mind that GoFundMe-type fundraisers generally don’t qualify as deductible donations – the money has to go to a qualified organization, not to an individual.

Trump Accounts

If you have a child under 18 you can now open a Trump Account for them. This is a tax-deferred investment account, meaning that earnings in the account are not taxed until they are withdrawn. You can contribute up to $5,000 per year for each child under 18, but contributions to Trump accounts are not deductible. Once your child turns 18, they can withdraw the money to pay for college or to buy a home. No withdrawals can be made before your child turns 18, and your child will pay tax on the withdrawals they make after they turn 18. For more information or to open a Trump Account, click here.

Bonus! For children born between January 1, 2025 and December 31, 2028 the government will make a one-time contribution of $1,000 to their Trump Account. So you might want to take advantage of this free money even if you don’t plan to make additional contributions.

Note: For college savings, a 529 account is better than a Trump Account because withdrawals from 529 accounts for educational expenses (including K-12 expenses) are tax-free whereas withdrawals from Trump Accounts for any purpose are always taxable. Also, parents can contribute up to $19,000 each ($38,000 per couple), per child, to a 529 account every year. If you are considering either option, I can help you decide, just let me know.