FREE NEWSLETTER
I’m hoping Bill Perry and/or one of our other tax experts can answer this.
For tax year 2026, non-itemizers can deduct charitable contributions of up to $1000 (single) or $2000 (married). What I’m trying to understand is whether this deduction is taken before figuring AGI (Adjusted Gross Income) or after. I just did a quick web search and got conflicting answers—even from apparently knowledgeable sources.
Why worry about it long before we’re doing our 2026 taxes? Because every fall I try to estimate what our taxable income will be for the year so as to know how much in QCDs (Qualified Charitable Donations) I should make from our RMD so as to reduce income enough to avoid an IRMAA cliff and/or a higher marginal tax bracket. I imagine there are other HDers who do the same.
Many thanks to anyone who knows the definitive answer.
My research show this: This deduction is taken before above-the-line deduction. I believe this to be correct based on Gemini. Do not be afraid to ask tax questions of Gemini. I make my calculations generally in Nov when I take my RMD to insure I pay the correct Fed and State taxes to avoid penalties, and try to keep all items like IRMMA to the max without going to the next higher level. I developed a spreadsheet which reflects how I use the tax forms, and that works for me.
William, you might want to check the comments below, including Bill Perry’s link to the draft 2026 1040. It has line 12f showing this deduction is anticipated to be below-the-line (after AGI is calculated).
You used to be able to classify tax deductions as “above the line” meaning before AGI or “below the line” meaning you had to itemize using Schedule A, instead of taking the standard deduction.
Now we have a third category, where certain items are deducted “below the line” but they are not reported on Schedule A (this includes the senior deduction for 2025-2028 and the cash charity deduction starting with tax year 2026).
In 2023, approximately 89.2% of taxpayers (generally low- and middle-income taxpayers) claimed the standard deduction, while 9.4% (generally high-income taxpayers) claimed itemized deductions per final government information.
The final percentages of those itemizing for tax years 2024 and 2025 are not yet available but are expected to be similar to the 2023.
For the vast majority of taxpayers the effect of our current income tax laws means financial decisions that involve considering their tax impact are most beneficial to those whose actions result in either an exclusion from taxable income (above the line like a qualified charitable distribution) or a deduction below the line that is available even when you do not itemize.
Taxpayers who still itemize their deductions may only be partially benefiting as the additional benefit from itemized deductions is best measured by the extent that the itemized deductions exceed their available standard deduction times their marginal tax rate. Sometimes for taxes the how you do something is more important than the why you do it.