The 2025 Tax Bill Update

What You Should Know

On July 4, 2025, Congress enacted new federal tax legislation that introduces several provisions affecting charitable giving and personal finance—some beginning in 2025, others in 2026 and 2027. Below is a summary of key updates and what they could mean for your philanthropy to St. Mary’s Ryken High School and other organizations you value.

Key Tax Changes

Increased state and local tax (SALT) deduction
Beginning in 2025, itemizers can deduct up to $40,000 in state and local taxes (up from $10,000). This expanded benefit is scheduled to revert to $10,000 in 2030.

Higher standard deduction
The 2025 standard deduction increases to $15,750 for single filers and $31,500 for joint filers, reducing the number of taxpayers who itemize their deductions.

Additional deduction for taxpayers age 65 and older
 For tax years 2025–2028, individuals age 65+ (even those who don’t itemize) may claim an additional $6,000 per taxpayer or $12,000 per couple. This benefit phases out at $75,000 AGI (single) or $150,000 AGI (joint).

Estate and gift tax exemption increase
The exemption rises to $15 million per individual (or $30 million per married couple) for 2026, indexed for inflation—creating an opportunity for larger legacy and estate gifts.

IRA Qualified Charitable Distributions (QCDs): Still a Powerful Giving Option
Individuals aged 70½ or older can continue to make tax-free gifts directly from their IRA to qualified charities—up to $108,000 in 2025 and $115,000 in 2026. These gifts count toward your Required Minimum Distribution (RMD) and help lower Adjusted Gross Income (AGI), offering a meaningful way to give while managing taxable income.

The rules remain consistent, though the IRS has introduced a new optional reporting code (Code Y) for 2025 on Form 1099-R.

The one-time “split-interest” QCD option under the SECURE 2.0 Act is still available, allowing a single transfer of up to $54,000 to fund a charitable gift annuity or remainder trust.

Together, these provisions make now an excellent time to review charitable IRA strategies with your advisor to maximize impact while minimizing taxable income.

New Federal School Scholarship Tax Credit (Effective 2027)
 Starting in 2027, individual taxpayers may claim a federal tax credit of up to $1,700 for contributions to an approved Scholarship Granting Organization (SGO) that provides tuition assistance to K–12 students at schools like St. Mary's Ryken! Because this is a tax credit (not just a deduction), it directly reduces your tax bill dollar-for-dollar. If Maryland opts into this federal program, contributions that support scholarships at St. Mary’s Ryken may become eligible. Check with your financial advisor for guidance and eligibility.

Charitable Giving: New Opportunities and Considerations (Effective 2026)

Universal charitable deduction for non-itemizers
Beginning in 2026, all taxpayers may deduct up to $1,000 per person ($2,000 for joint filers) in charitable gifts, even without itemizing. Gifts must be made to qualified public charities—such as St. Mary’s Ryken—to qualify.

Deduction cap for top income earners
 For those in the 37% top tax bracket, charitable deductions will be capped at 35%.

“Giving floor” for itemized deductions
 Only the portion of charitable gifts that exceeds 0.5% of adjusted gross income (AGI) will be deductible.
 Example: A donor with $100,000 in AGI who contributes $2,500 to charity may deduct $2,000—the first $500 (0.5% of AGI) is non-deductible.

Charitable Planning Strategies to Consider to Maximize Tax Savings

Non-itemizers: Take advantage of the new universal charitable deduction beginning in 2026—up to $1,000 per person, even if you claim the standard deduction.

High-income donors: Consider making larger gifts before the 2026 limits take effect to maximize your current 37% deduction rate.

Consistent givers: Explore “bunching” your donations—combining two or more years of gifts into one tax year—to optimize deductions while maintaining your regular giving rhythm.

Supporters of Independent Schools and Catholic education: Ask your advisor whether contributions to St. Mary’s Ryken scholarships or The Knight Fund could qualify for the new Federal School Scholarship Tax Credit once Maryland participates.

Learn More About How You Can Make This Possible In Maryland

Let’s Plan Together

Thoughtful charitable planning ensures your generosity has the greatest impact—for you, your family, and future generations of St. Mary’s Ryken Knights.

For more information or a confidential conversation about your giving plans, please contact:

Michele Minicozzi, Director of Development
 📧 development@smrhs.org
 📞 301-373-4162

---

This information is provided for educational purposes only and does not constitute legal or financial advice. Please consult your personal advisor regarding the tax implications of your charitable giving.