Charitable Giving Strategies for Dentists (2026 OBBBA Rules)

The One Big Beautiful Bill Act changed how charitable deductions work starting in 2026. For dentists — who typically have high incomes, large standard deductions, and often face a practice-sale windfall — the new rules mean that ad hoc giving is significantly less efficient than it used to be. The right structure can still make giving very tax-efficient. The wrong approach wastes the deduction entirely.

The 2026 charitable deduction landscape

Before choosing a giving vehicle, understand what changed and what it costs you:

What this means in practice: a dentist with $500,000 AGI faces a $2,500 non-deductible floor. Giving $5,000 to their dental school alumni fund yields a deduction on only $2,500. At the 35% effective cap, that's an $875 benefit on a $5,000 gift — 17.5% effective rate. Before OBBBA, they'd have deducted all $5,000 at 37%: $1,850. The difference matters at scale.¹

Strategy 1: Donor-Advised Fund (DAF) — the most versatile tool

A donor-advised fund lets you contribute cash or appreciated securities in a single tax year and take the deduction immediately, then recommend grants to specific charities over time. For dentists, the power is in the timing flexibility and the ability to bunch.

How DAF bunching clears the floor and the standard deduction

If you give $12,000/year to charity, you have two choices. Option A: give $12,000 each year. Under the standard deduction of $32,200 MFJ, you probably don't itemize, so you get the $2,000 above-the-line deduction (if it applies) and nothing else. Option B: contribute $60,000 into a DAF in one year, then recommend $12,000/year in grants for five years. In the contribution year, your itemized charitable deduction is $60,000 minus your 0.5% AGI floor. If your AGI is $400,000, the floor is $2,000, leaving $58,000 deductible — far above the standard deduction.

Bunching to a DAF is nearly 6× more tax-efficient in this example. The charity receives the same amount either way; only your tax outcome differs.²

Appreciated securities: the most efficient DAF contribution

If you hold appreciated stock, ETF shares, or mutual fund positions in a taxable brokerage account — common for dentists who have been investing practice income for years — contributing those assets directly to a DAF is more efficient than selling and donating cash.

Example: you own $30,000 of an S&P 500 ETF you bought for $10,000. Selling it costs you $4,760 in capital gains tax (23.8% LTCG + NIIT on $20,000 gain). Contributing the shares directly to a DAF means you deduct the full $30,000 fair market value and owe zero capital gains tax. The DAF sells the position tax-free inside the fund. That's a $4,760 difference — before the income tax deduction value.³

DAF contributions of appreciated assets are limited to 30% of AGI per year (vs. 60% for cash), but carryforward of excess deductions is allowed for five years.

Practice sale and DSO earnout years: front-load the DAF

A dentist netting $1.5 million from a practice sale is in the 37% bracket — but their deduction is capped at 35 cents per dollar. The marginal deduction value is as high as it gets in your career. Contributing $200,000 to a DAF in the sale year (within the 60% AGI limit) yields a $70,000 immediate tax benefit at the 35% cap value, plus offsets IRMAA exposure by reducing AGI in future years. See the IRMAA planning guide for how the two-year lookback interacts with a large sale year.

Strategy 2: Qualified Charitable Distribution (QCD) — for dentists 70½ and older

If you are at least 70½ years old and have a traditional IRA, a Qualified Charitable Distribution lets you transfer up to $111,000 directly from the IRA to a qualified charity — completely tax-free.⁴ The QCD never appears in your AGI, which means:

• It counts toward your required minimum distribution (RMD), reducing a distribution you'd otherwise have to pay income tax on
• It doesn't trigger the OBBBA's 0.5% AGI floor, because it's not a deduction — it's an exclusion from income
• It doesn't show up in AGI, so it doesn't inflate IRMAA tiers, Social Security taxation, or Medicare Part D surcharges
• It benefits dentists who take the standard deduction and can't use itemized charitable deductions at all

A retired dentist with a $700,000 IRA RMD of $28,000 who gives $15,000 to charity each year gets far more benefit directing that gift as a QCD than writing a check from their bank account. The check gives a deduction they may not be able to use (below standard deduction after OBBBA floor). The QCD reduces taxable income by $15,000 — dollar for dollar.

In 2026, up to $55,000 of a QCD can go to a split-interest vehicle — specifically a charitable remainder trust (CRT) or to fund a charitable gift annuity — rather than directly to a public charity.⁴

Strategy 3: Charitable Remainder Trust (CRT) — for practice sale proceeds

A Charitable Remainder Trust is worth considering when you have a large, highly appreciated asset — typically a dental practice — that you plan to sell. The structure:

1. You transfer the practice (or other appreciated asset) to the CRT before the sale closes
2. The CRT sells the asset, pays no capital gains tax at the time of sale
3. The CRT pays you (and optionally a spouse) an income stream — typically 5–7% of the trust value annually — for life or a term of years
4. At the end of the trust term, the remaining assets pass to charity
5. You receive an immediate charitable deduction for the present value of the charity's projected remainder interest

For a dentist with a practice worth $1.2 million, most of which is goodwill taxed at 23.8% LTCG + NIIT rates, transferring to a CRT before sale and redirecting that capital to an income-generating trust can meaningfully defer capital gains and provide lifetime income — while funding a cause you care about at the end. This is complex and requires an estate attorney and a fee-only financial advisor experienced in charitable planning.

A CRT doesn't eliminate capital gains entirely — distributions to you from the CRT have a specific income character (the "tier" rules, with ordinary income distributed first, then capital gains). But it spreads the recognition over years and lets the full pre-tax proceeds compound inside the trust before you draw them down. See how this integrates with overall practice sale tax planning.

Strategy 4: The $2,000 above-the-line deduction for non-itemizers

Starting in 2026, taxpayers who take the standard deduction can deduct up to $1,000 (single) or $2,000 (MFJ) in cash charitable contributions as an above-the-line deduction.¹ This is a new benefit — but it comes with important restrictions:

• Cash only — no appreciated assets, no DAF contributions
• Must go directly to a qualified public charity — not a donor-advised fund
• Must be a direct gift in that tax year — carryforwards don't count

For most practice-owning dentists who itemize, this doesn't apply. But for an associate dentist with a $200,000 income taking the standard deduction, this is a guaranteed $2,000 deduction — worth $440 at the 22% bracket — for any cash gift to a qualifying charity. Small, but free.

What not to do: common mistakes for high-income givers

• Giving cash when you own appreciated stock. Sell stock → pay capital gains → donate cash → get deduction on less than you would have. Always contribute appreciated assets first.
• Annual small gifts to multiple charities. Five $3,000 gifts to different organizations gives you $15,000 of charitable spending that likely doesn't clear your standard deduction after the OBBBA floor — especially if your AGI is high. Consolidate into a DAF and bunch years together.
• Leaving large IRA balances to your children when you want to give anyway. Under the SECURE Act's 10-year rule, inherited IRAs are taxable to your children (who may be in high brackets themselves). Directing IRA funds via QCD to charity and leaving taxable brokerage accounts — which get a stepped-up basis at death — to your heirs is often more efficient. Coordinate with your estate plan.
• Waiting until April to decide. QCDs and charitable contributions must be completed by December 31. DAF contributions must also hit by December 31 to count in that tax year. The decision requires knowing your full-year income, which is often a Q4 exercise with your CPA and advisor.

How charitable giving fits with overall dentist tax planning

Charitable giving doesn't exist in isolation. For practice owners, the most tax-efficient giving plan coordinates with:

• Retirement contributions first: a solo 401(k) + cash balance plan contribution at $200,000+/year reduces AGI before you even think about itemized deductions. Lower AGI also reduces the dollar amount of the 0.5% floor. See the cash balance plan guide.
• Roth conversions and IRMAA: in years you do a large Roth conversion, your AGI rises significantly. A DAF contribution in the same year can offset the marginal deduction value at the higher bracket. See the Roth conversion guide.
• Year-end checklist integration: charitable decisions belong in Q4 planning alongside solo 401(k) finalization, equipment purchases, and estimated taxes. See the year-end tax planning checklist.