How tax savings estimates work

Summary: Charity Record estimates your potential federal tax savings by multiplying your donation total by your marginal federal tax rate. This is a simplified estimate that generally assumes you itemize. See IRS Publication 526 for full charitable contribution rules.

What the estimate shows

We calculate your estimated savings using this formula:

Estimated savings = Marginal tax rate x Total donations

For example, if you're in the 24% tax bracket and you donated $1,500 this year:

24% x $1,500 = $360 estimated savings

This means your charitable donations could potentially reduce your federal tax bill by approximately $360.

What we assume

Our estimate makes several simplifying assumptions:

  • You itemize deductions. The charitable deduction only applies if you itemize on Schedule A instead of taking the standard deduction. Many taxpayers take the standard deduction.
  • All donations qualify. We assume your donations are to qualifying 501(c)(3) organizations and meet IRS requirements. See our help article on What counts as a charity? for more.
  • No AGI limits apply. The IRS limits charitable deductions based on your adjusted gross income (for example, cash donations to public charities are limited to 60% of AGI). We don't check these limits. See IRS Publication 526.
  • No state taxes included. This estimate is for federal taxes only. State tax benefits vary.

What we don't calculate

For simplicity, our estimate does not account for:

  • The 0.5% AGI floor (2026+). Starting in 2026, if you itemize, the first 0.5% of your AGI isn't deductible under federal law changes. For example, if your AGI is $200,000 and you itemize, your first $1,000 of donations wouldn't be deductible. We don't collect AGI – see our Privacy Policy for details.
  • Carryforward amounts. If you exceeded AGI limits in prior years and have carryforward deductions, we don't track those.
  • Alternative Minimum Tax (AMT). If you're subject to AMT, your actual benefit may differ.
  • Above-the-line deduction for non-itemizers. Starting in 2026, non-itemizers can generally deduct up to $1,000 ($2,000 if married filing jointly) in cash donations to public charities. This provision applies to cash only (not mileage or other non-cash donations). We show an itemized-deduction estimate, so we do not display this separate cash-only benefit.

For 2026 and later

Federal law changes made several updates to charitable deductions starting in 2026:

35% cap for top bracket (we model this): If you itemize and you're in the 37% tax bracket, the benefit of your itemized deductions is capped at 35%. Charity Record applies this cap automatically when estimating your 2026+ savings.

0.5% AGI floor (we don't model this): The floor requires your exact AGI, which we don't collect. For planning purposes, be aware that donations up to 0.5% of your AGI may not be deductible.

For tax years before 2025

We apply 2025 tax brackets as an approximation for earlier years. In practice, changes to your filing status and income typically matter more than small inflation adjustments to brackets.

When to consult a tax professional

For a more precise estimate or help preparing your taxes, consult a qualified tax professional.

IRS resources

For official guidance on charitable deductions:

Sources

Charity Record is a donation tracking tool, not a tax advisor. This article summarizes publicly available IRS guidance to help you use our software. You are responsible for ensuring your tax filings comply with IRS requirements. For a more accurate estimate or help preparing your taxes, especially for complex situations such as AMT, high-income itemized limits, large non-cash gifts, multi-state filings, etc., consult a qualified tax professional.

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