The big news in the financial planning world recently has been the passing of the “One Big Beautiful Bill Act,” or OBBBA. There are over 100 tax sections in the new law, so only a small part may have an impact on any individual household.

The many small adjustments are one of the reasons working with a financial planning professional, who partners with a tax professional, is the best way to pursue strategies that align with your situation. As examples, I am spotlighting one component of the new tax law and how planning makes a difference.

Charitable contributions 

A favorite part of the team’s job here at Piton Wealth is facilitating charitable contributions and, in particular, being strategic so that those contributions have as much impact as possible for the causes themselves. The new restrictions and opportunities that go into effect with the passing of OBBBA reinforce that planning is critical to maximizing their impact.

First, those who do not itemize on their returns will be able to deduct up to a $1,000 of charitable cash contributions ($2,000 for those filing jointly). For those who itemize, the options become more complex. Charitable contributions have long been subject to limits on their deductibility, calculated with respect to AGI and depending on the type of property donated and the type of organization receiving the donation.

OBBBA introduces, for the first time, a “floor” on the deductibility of charitable contributions, which means that deductions are allowed only above a specified percentage of their AGI (specifically 0.5%).

Several features in this structure point up the difference that careful planning can make in taxes to be paid and thus how much is available for charitable contributions. First, the new provisions do not begin until tax year 2026 (filing in 2027), so some charitable contributions might make more financial sense in the 2025 tax year, before the new rules apply.

Planning is crucial

When the new rules take effect, planning will remain crucial. If a charitable contribution exceeds the limits calibrated to adjusted gross income, or AGI, the excess contribution is not deductible in that tax year but can be carried forward to be deducted in a future year for up to five years. Depending on the circumstances, the amount disallowed in the “floor” in a given year can also be carried over to the next year. In situations like this, strategic and forward-looking planning can improve the balance between charitable contributions and the amount of taxes to be paid. 

Opportunities like those in OBBBA reinforce the importance and value of financial planning. No one can predict the future of tax changes, so when the choices and opportunities seem vague or overwhelming, keep perspective: set the goal, make a plan and then you can (and will!) revise and update that plan.

This of course holds true for many journeys in life, career, personal, spiritual as well as financial. Rather than worry about or defer financial plans, keep it simple and commit to some basics, and just expect –or rather know – that changes and revisions to those goals and plans will be coming.

Michelle Clary is a certified financial planner, chartered financial consultant, chartered life underwriter, retirement income certified professional and accredited estate planner. She is founder and chief executive officer and senior wealth advisor at Piton Wealth in Kennewick and Kalispell, Montana.