Charitable Giving and Taxes: What’s Changing in 2026?

March 10, 2026

Charitable giving is an important part of how many families support their churches, nonprofits, and local communities. Starting in 2026, however, new federal tax rules change how charitable donations show up on your tax return.

Here are the key updates and what they may mean for your family.

First: A Quick Refresher on Standard vs. Itemized Deductions

When you file your tax return, you can either claim the standard deduction or itemize deductions.

For 2026, the standard deduction is scheduled to be approximately:

$16,550 for single filers
$33,100 for married couples filing jointly

Most households take the standard deduction because it’s larger than their itemized deductions. Itemized deductions typically include things like:

Mortgage interest
State and local taxes (subject to the SALT limit)
Charitable donations
Certain medical expenses

Only taxpayers who itemize can normally deduct charitable contributions—but that is changing in 2026.

1) A New Charitable Deduction for Non-Itemizers

Beginning in 2026, taxpayers who take the standard deduction can claim a small charitable deduction for cash donations:

Up to $1,000 for single filers
Up to $2,000 for married couples filing jointly

This deduction is above the line, meaning it reduces taxable income even if you do not itemize. It generally applies to cash gifts made directly to qualified charities, not donor-advised funds or private foundations.

However, taxpayers who itemize deductions cannot claim this additional deduction.

2) A New Minimum Threshold for Itemized Charitable Deductions

For households that do itemize deductions, a new rule also begins in 2026: only charitable donations above 0.5% of Adjusted Gross Income (AGI) are deductible.

For example:

Household AGI: $200,000
0.5% threshold: $1,000

If the household donates $5,000 to charity, the first $1,000 would not be deductible, and the remaining $4,000 could be included with their itemized deductions.

What This Means for Families

For many middle- and upper-income households, the practical impact is fairly simple:

Families who take the standard deduction may now receive a small tax benefit for charitable giving.
Families who itemize deductions may want to be a bit more strategic about the timing and size of their donations. “Bunching” charitable donations every other year, or every third year, now may become even more valuable in some cases with the addition of these two changes to the tax code.

Tax rules may shift, but charitable giving remains a powerful way to support the causes and communities that matter most. Lynden Financial Planning encourages clients to give with a cheerful heart, but also helps implement tax-efficient charitable giving strategies to see client’s charitable dollars go further.

This article is for educational purposes only and should not be considered tax advice. Please consult a qualified tax professional regarding your specific situation.

3 Timeless Market Observations We Were Remined of in 2025

January 29, 2026

1) Time in the market beats trying to time the market.

One of the clearest reminders in 2025 was that investors who stayed invested through volatility were rewarded. During the sharp sell-off in April tied to trade tensions, markets bounced strongly later in the year. Those who tried to sell low and “buy the dip” often missed the rebound, reinforcing the age-old advice that time in the market matters more than timing it. Trying to trade around short-term news can be costly — we believe patience and staying the course through ups and downs often leads to better long-term outcomes.

2) Diversification still matters — perhaps more than ever.

U.S. stocks delivered solid returns in 2025, but they weren’t the standout everywhere. International stocks and gold both outperformed U.S. equities, reminding investors that leadership rotates and that returns don’t come from the same place every year. Portfolios diversified across regions and asset types potentially benefited from having more than one engine working at a time. Diversification isn’t about predicting which asset will win next — it’s about being positioned so that something is potentially working, regardless of the market environment.

3) Markets reflect fundamentals — not just headlines.

Across 2025, headlines (rate moves, geopolitical tensions, AI “bubble” fears) sparked volatility, but ultimately markets trended based on underlying corporate earnings and economic fundamentals. The overall valuation of the market started and ended the year in virtually the same spot. Almost all of the price appreciation in the US stock market came because of corporate earnings growing. Markets can fluctuate wildly in the short term, but anchoring decisions on long-term fundamentals rather than short-term news helps maintain clarity when headlines are distracting.

Washington State Estate Tax Changes in 2025: What Lynden Families Should Know

October 14, 2025

Q1: Does Washington State have an estate tax?

Yes. Unlike many states, Washington imposes its own estate tax in addition to the federal estate tax. The state exemption amount has historically been around $2.193 million per person, but in 2025, the exemption is set to increase to $3 million. This means estates valued below $3 million will generally not be subject to Washington’s estate tax.

Q2: How does the Washington State estate tax compare to the federal estate tax?

Federal estate tax exemption: $13.99 million per person (2025), $15M per person (2026)
Washington State estate tax exemption (2025): $3 million per person.
Key difference: Many families in Lynden and Whatcom County will never reach the federal threshold, but may be affected by Washington’s much lower state-level threshold.

Q3: Who in Whatcom County might be impacted by these changes?

Families who own:

Homes or farmland in Lynden, Ferndale, or rural Whatcom County that have appreciated significantly over the last few decades.
Business interests, especially family-owned farms or companies.
Investment portfolios or retirement accounts that push their estate value above $3 million.
Even if you don’t consider yourself “wealthy,” property values in our area can make more households subject to estate taxes than they expect.

Q4: What are some estate planning strategies to consider?

Some common approaches include:

Lifetime gifting: Transferring assets during your lifetime to reduce the taxable estate.
Trusts: Using credit shelter trusts, QTIP trusts, or other vehicles to maximize exemptions.
Charitable giving: Donating to qualified charities can reduce your taxable estate while benefiting local organizations.
Family business/farm planning: Special strategies exist to help pass down businesses and farms with minimized tax impact.

Q5: Why is it important to plan now?

Estate tax planning is best done early—before changes in the law or family circumstances create unnecessary costs. With the Washington exemption increasing in 2025, Lynden families have a chance to reassess whether their estate plan is still effective.

Final Thoughts

For families in Lynden, Bellingham, and throughout Whatcom County, the Washington estate tax can create unexpected costs if not planned for. Reviewing your estate plan with a financial planner who understands both state and federal rules is an important step in protecting your wealth and ensuring it passes to your loved ones smoothly.

At Lynden Financial Planning, we specialize in comprehensive planning—including estate, tax, retirement, and investment strategies—to help local families prepare for the future.

Sources (date: October 13, 2025):

https://dor.wa.gov/taxes-rates/other-taxes/estate-tax

https://dor.wa.gov/taxes-rates/other-taxes/estate-tax-tables

https://www.pugetlaw.com/probate/estate-tax-information/

https://perkinscoie.com/insights/update/washington-tax-changes-2025-capital-gains-estate-tax-increases-and-wealth-tax

Lynden Financial Planning and LPL Financial do not provide legal or advice. Please consult your legal or tax advisor regarding your specific situation.

New Tax Planning Opportunities Under the “One Big Beautiful Bill” — What Lynden, WA and Whatcom County Residents Need to Know

September 18, 2025

Q1: What is the “One Big Beautiful Bill” (OBBB), and why should I care?

A: The One Big Beautiful Bill Act (signed into law July 4, 2025) is a sweeping federal tax law (Public Law 119-21) that introduces multiple new deductions and adjustments affecting individual taxpayers. If you live in Lynden or anywhere in Whatcom County, these changes may affect your federal tax liability—and create planning opportunities.

Q2: What are the key federal changes under OBBB that individuals should know?

A: Some of the most relevant provisions include:

Deduction for Tips: Eligible occupations can deduct qualified tips (up to $25,000 per year, whether or not you itemize). This primarily helps restaurant, service industry, and hospitality workers in Lynden and the Bellingham area.
Deduction for Overtime Pay: You may deduct the “half-time” portion of time-and-a-half overtime wages, up to $12,500 (or $25,000 if filing jointly). This benefits those working extra hours—part-time, seasonal, or full-time with overtime.
Car Loan Interest Deduction (for Certain U.S.-Assembled Vehicles): Interest on a loan for a qualifying vehicle may be deductible (not leasing), up to $10,000/year. Residents purchasing cars that meet these criteria can take advantage.
Senior Deduction: Individuals age 65+ can claim an additional standard deduction of $6,000 per person (through 2025–2028, phased out above certain income levels). This primarily benefits seniors living in Lynden and Whatcom County on Social Security.
Charitable Donation Changes: The bill increases the deduction limits for cash contributions to qualified charities—up to 60% of your adjusted gross income (AGI) for most taxpayers. Starting in 2026, even taxpayers who don’t itemize will be able to claim a small above-the-line deduction for cash donations, giving Lynden and Whatcom County residents extra flexibility to support local nonprofits or religious organizations.

Q3: Are there Washington State-specific tax changes or planning considerations to watch?

A: Yes. Besides the new federal changes, Washington State has updated its estate tax law, among other updates. Notably:

As of July 1, 2025, Washington raised its estate tax exemption to $3 million, up from the lower level that had been effectively frozen for some time. Estates above that threshold will face increased rates.
Also, the estate tax exclusion will now adjust annually for inflation, which helps protect estates in our area from creeping into the taxable range without planning.

Q4: What tax planning strategies should Lynden / Whatcom County residents consider in light of these changes?

A: Depending on your situation, some useful planning moves might include:

Review your work & income structure — If you earn overtime or receive tips, ensure your records (pay stubs, W-2s or 1099s) clearly document tips/overtime, since the new deductions require proper reporting under the law.
Vehicle purchases — If you are considering buying a car and expect to use it personally, check if it qualifies (assembled in U.S., meets federal weight/use thresholds) to take advantage of the car-loan interest deduction.
Estate planning update — If your estate is near or above $3 million (or your inheritance expectations are high), it’s a good time to review wills/trusts, gifting strategies, etc., knowing Washington’s revised rules.
Senior taxpayers — If you or your spouse are 65+, make sure you understand how the additional deduction works, and whether income phase‐outs might affect it.
Local advisory & tax professional consultation — Laws are new, many rules are just coming into guidance, so working with a financial planner or CPA familiar with Lynden/Whatcom County specifics can help maximize benefits and ensure compliance. (Schedule a free consultation: https://go.oncehub.com/lynden)

Q5: What mistakes should people in Lynden avoid under OBBB and the Washington changes?

A: Some common pitfalls might include:

Declaring tips or overtime income without correct documentation or in occupations not eligible under IRS definitions.
Buying a vehicle that doesn’t meet the “assembled in the U.S.” or other qualifying criteria, or leasing rather than owning—leasing disqualifies the car-loan interest deduction.
Neglecting estate plans because you assume the old exemptions apply. Washington’s law changed — it’s not enough to rely on outdated thresholds.
Not considering income phase-outs: many of the new deductions phase out when your Modified Adjusted Gross Income (MAGI) exceeds thresholds (for example, the tip deduction and senior deduction).

Q6: How can someone in Lynden get help with implementing these changes in their financial plan?

A: Lynden Financial Planning is here to help. We offer comprehensive planning that integrates:

Federal tax strategy (including new OBBB provisions),
Washington State and local tax considerations,
Estate & retirement planning,
Personalized analysis of your situation (income, assets, age, business or employment type).

If you’d like a free, no-obligation review, we can walk you through what’s changed under OBBB, how you might benefit, and what moves make sense given your goals here in Whatcom County. (Schedule a free consultation: https://go.oncehub.com/lynden)

Conclusion

If you’re living in Lynden, Bellingham, or nearby in Whatcom County, these tax changes bring new opportunities — but also require careful planning. Taking advantage of deductions for tips, overtime, certain auto-loans, changes with charitable deductions, and updated estate tax laws can meaningfully reduce tax burden if done right. Being proactive can make a big difference.

Sources:

https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors