If your business donates to local nonprofits, schools, or community projects, the 2026 charitable giving rules change how much of that generosity you can deduct. The mechanics are more complex, but with the right systems you can still give strategically and get the full benefit available.

What Changed for Small Businesses in 2026

• Your corporation can now deduct charitable contributions only to the extent they exceed 1% of taxable income, and total deductible contributions are still capped at 10% of taxable income, with excess potentially carried forward up to five years.
• As an individual owner, your personal deductions are subject to a 0.5% AGI floor, though cash gifts to qualifying public charities remain deductible up to 60% of AGI.
• A new, permanent charitable deduction for non‑itemizers lets individuals deduct up to $1,000 (single) or $2,000 (joint) for qualifying gifts starting in 2026.
• All of this sits on top of existing substantiation rules: written acknowledgments for gifts of $250 or more and additional requirements for non‑cash contributions.​

Action Steps for Owners and IT Teams

For the business owner:

• Revisit your giving strategy:
  • Identify how much you typically give each year and whether it clears the new 1% floor and stays within the 10% cap for corporate deductions.
• Coordinate with your tax advisor:
  • Decide whether to increase or bunch certain donations into specific years so you actually realize the deductions you expect.
• Clarify business vs. personal giving:
  • Separate corporate contributions from personal donations so both you and your company can plan around the new floors and limits.

For your IT or technical team:

• Build a clear digital trail:
  • Implement structured storage for donation receipts and acknowledgments, linked to accounting entries and accessible for your CPA during tax season.​
• Standardize data and approvals:
  • Use simple forms or workflows where staff record donation details—amount, date, charity, purpose, and whether any benefits were received—before payments go out.​
• Security and retention:
  • Protect donor‑related and financial data with proper access controls and keep records long enough to support the five‑year carryforward window for excess contributions.

Questions Your Customers or Community Partners May Ask

• “Is my company’s sponsorship of your event still tax‑deductible?”
  • It may be treated as a charitable contribution or as advertising/marketing depending on the benefits received; in either case, new floors and caps can affect the deduction.
• “Does it still help me tax‑wise if I give small amounts?”
  • Smaller gifts may not exceed the new floors by themselves, which is why many taxpayers will see more benefit from fewer, larger, or more concentrated gifts.
• “Why do you need to send such detailed receipts?”
  • The IRS requires specific elements in acknowledgments for gifts of $250 or more and for non‑cash donations, so detailed receipts protect both you and your donors.​

How Farmhouse Networking Supports SMBs

Farmhouse Networking helps small and mid‑sized businesses turn charitable giving from an ad‑hoc expense into a well‑tracked, well‑documented, and strategically planned process. We integrate your accounting tools with secure document management, create simple digital forms for recording donations, and set up dashboards so you can see where you stand relative to the 1% floor and 10% cap.

We also support customer‑facing communication—website content, FAQs, and email updates—so your community partners understand that you are still committed to giving, and how the 2026 rules affect them.

Email support@farmhousenetworking.com to find out how Farmhouse Networking can help your business modernize its systems and make smarter, more strategic charitable giving decisions under the new 2026 regulations.