The One Big Beautiful Bill Act (OBBBA) is reshaping how individuals approach tax strategy, philanthropy, and wealth transfer. With new rules around charitable deductions, SALT limits, and the treatment of appreciated assets, high-net-worth taxpayers are rethinking how (and when) they give.

To unpack what these changes mean for charitable donors and private clients, we sat down with Dave Desmarais, KLR’s Private Client Services Practice Leader, who advises high-net-worth individuals and families on complex tax and estate strategies. In this Q&A, Dave shares how OBBBA is influencing charitable giving in 2025 and beyond, why timing still matters, and what strategies clients should consider before year-end to maximize both impact and tax efficiency.

Q: I know this is a popular time for clients to be thinking about charitable giving. How has the OBBBA changed the timing, limits, and overall strategy for year-end donations?

Dave: One of the most important shifts under OBBBA is that charitable deductions will now face two new limits often referred to as the “shave” and the “haircut.” The shave (or floor) is calculated using a taxpayer’s modified adjusted gross income (MAGI). Beginning in 2026, anyone who itemizes will only be able to deduct the portion of their charitable contributions that exceeds 0.5% of their MAGI.

To put that in perspective, someone with $500,000 of MAGI would lose the deduction for the first $2,500 they donate. It might seem minor on its own, but when combined with the haircut (which reduces the tax benefit of these deductions for those in the 37% tax bracket to 35%) the impact on total tax savings can add up quickly.

That’s why many higher-income clients are considering making their larger charitable gifts in 2025. Doing so allows them to take advantage of the current, more favorable rules before these new limits kick in next year.

Q: How are you advising clients now to maximize giving and tax benefits before year-end?

Dave: A lot of what I am advising this year actually has nothing to do with OBBBA, since most of those changes are effective for 2026. Take, for example, a client with $750,000 in charitable commitments and an AGI of $700,000. If she uses appreciated property, she can take a $210,000 deduction (30% of AGI), with the remainder carried forward to future years. 

The key is timing. In this case, she’s in a higher tax bracket on ordinary income now than she might be in the future on capital gains. So why wait? Accelerating the donation now makes sense. That half-percent “haircut” under OBBBA isn’t material enough to dictate timing; market appreciation could offset it anyway.

Q: In the past, you’ve talked about donor-advised funds and bunching donations as a year end strategy. Is that still something you recommend?

Dave: Absolutely. Bunching is still very relevant, especially for clients who are truly philanthropic. The idea is simple: if your standard deduction is $30,000 but you give $10,000 in charity per year, you’re never fully benefiting. By bunching say, five years of donations into one year, you maximize the deduction in that year while still supporting your charitable goals.

For high-income clients, the phase-out limitations for SALT and other deductions still apply, so strategic planning like bunching remains important.

Q: Are there other OBBA changes impacting high-net-worth clients?

Dave: From a private client perspective, the major changes are mostly around charitable giving and SALT deductions. Estate and gift exemptions haven’t shifted dramatically; they’re codified at $15 million, so there’s no rush or “use it or lose it” scenario.

The focus now is more on strategies like “squeezes and freezes.” For example, giving appreciated assets in life versus at death can have very different tax consequences. Family limited partnerships, Grantor Retained Annuity Trusts (GRATs), and other structures can help clients manage transfers and maximize step-up in basis while minimizing taxable events. These strategies are nuanced but critical for high-net-worth planning.

Q: What’s your top tip for clients looking to maximize savings before year-end?

Dave: It really depends! The standard advice is to maximize deductions and defer income where possible, but with OBBBA, there aren’t any big surprises in tax rates for 2025.

It’s more about checking in, reviewing individual circumstances, and identifying opportunities. For some, it could be prepaying certain taxes; for others, strategic charitable giving. Planning has become much more client-specific than it used to be.

Curious what other tax strategies are being reshaped by OBBBA?
This conversation with Dave Desmarais adds to our ongoing Inside OBBBA series, which has also featured insights from Meyer Levy, Deb Pallasch, Brad Lombardi, and Joe Tamburo. Catch up on the latest discussions here:

Stay tuned as we continue to break down the provisions that matter most to investors, businesses, and their advisors. Download our Year End Tax Planning Guides for Businesses and Individuals here.