'American Family employees can benefit from working with tax and legal professionals to revisit their 2025–2026 charitable giving timelines, as aligning these decisions with your broader financial picture can help you stay organized and make informed choices.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.
Healthcare Provider Update: Healthcare Provider for American Family American Family Insurance offers health insurance primarily through its partnership with HealthPartners and other regional health systems, depending on specific plan availability and state regulations. They provide a range of health coverage options, including individual and family plans as part of their broader insurance portfolio. Brief on Potential Healthcare Cost Increases in 2026 As the healthcare landscape evolves, significant rises in Affordable Care Act (ACA) premiums are expected in 2026, with average increases projected at around 20%. This surge is attributed to various factors, including escalating medical costs, the potential expiration of enhanced federal premium subsidies, and aggressive rate hikes from major insurers like UnitedHealthcare, which is requesting increases as high as 66.4% in certain states. Consequently, if these subsidies are not extended, many consumers could experience a staggering 75% increase in their out-of-pocket premiums, pricing out a substantial segment of middle-income families from adequate coverage. As a result, 2025 becomes a crucial year for consumers to proactively strategize to mitigate the financial impacts of skyrocketing healthcare costs. Click here to learn more
'For American Family employees, thoughtful timing of 2025–2026 charitable gifts can influence your long-term retirement strategy, making it important to consider your broader financial plan when making these choices.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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How the 2025–2026 rule changes may affect the tax benefits of your charitable gifts.
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The different charitable deduction rules for standard deduction filers versus itemizers.
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Strategies for timing your giving as a long-time American Family employee or retiree.
2025–2026 Charitable Giving: How New Regulations May Affect Your Tax Plan
By Wealth Enhancement's Kevin Land, CFP® and Wesley Boudreaux
Giving to charities at the end of the year has long been a December custom for many households, including long-time employees and retirees from American Family. However, the One Big Beautiful Bill Act has changed how charitable deductions work, with substantial updates taking effect in 2025 and 2026. As a result, the familiar “give by December 31” rule may not be the most tax-efficient approach anymore.
The law essentially establishes two different profiles of charitable donors starting in 2026:
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1. Filers who take the standard deduction.
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2. Filers who itemize deductions.
Depending on which group you belong to, the timing of your charitable contributions can lead to very different tax outcomes, which is especially important if most of your income and benefits come from years of work with American Family.
Below, we describe:
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1. Who stands to gain from postponing some gifts until 2026.
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2. Who stands to gain from increasing donations before or during 2025.
Group 1: Standard Deduction Filers
Why some people might prefer to wait and donate in 2026
Instead of itemizing, around 90% of Americans take the standard deduction, 1 and many American Family employees and retirees may fall into this category. Under the current 2025 rules, standard deduction filers generally do not receive any direct tax benefit from charitable gifts unless they itemize.
In 2026, that will change. Specifically, a new above-the-line charitable deduction will be available to standard deduction filers beginning in the 2026 tax year: 2
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- Up to $1,000 for single filers
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- Up to $2,000 for married couples filing jointly
Key characteristics—written into the law:
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- You do not need to itemize to claim this deduction.
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- Only monetary donations given to approved public charities are covered.
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- This deduction does not apply to supporting organizations or donor-advised funds.
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- Non-cash gifts such as household goods, appreciated stock, and cryptocurrency are not eligible.
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- The dollar limits are not indexed for inflation.
Real-world impact
In 2025, a cash donation made by a standard deduction filer is unlikely to produce any tax benefit unless that filer itemizes. If the same donor waits and gives in 2026, they may be able to deduct up to $1,000 or $2,000, depending on filing status.
For instance:
Let’s say you:
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- Are married and filing jointly
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- Typically donate $2,000 per year
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- Expect to take the standard deduction in both 2025 and 2026
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- Are in the 22% federal tax bracket
If you donate $2,000 in December 2025, you still take the standard deduction and do not gain any additional federal income tax savings from that gift.
If you instead donate $2,000 in January 2026, you can use the new $2,000 above-the-line deduction, which reduces your federal income tax by:
$2,000 × 22% = $440
Rules for documentation
Donors who give $250 or more in a single donation must obtain written confirmation stating that no goods or services were received in return for the contribution.
Who might use the standard deduction
While the standard deduction is available to all taxpayers, it may be used more often by:
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- Retirees with relatively limited deductible expenses
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- Younger individuals without many itemizable costs
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- Higher earners who have few deductions left to itemize (for example, capped SALT deductions)
For these donors, including many who spent their careers at American Family, delaying certain cash gifts until early 2026 may turn previously non-deductible contributions into tax-efficient charitable giving.
Group 2: Itemizers
Reasons for wanting to accelerate gifts into 2025
For those who currently itemize, 2025 may be the final year before new deduction restrictions apply, so timing could matter for long-time professionals whose pay and benefits have grown over many years at American Family.
What changes in 2026?
New charitable “floor” of 0.5% of AGI
Starting in 2026, charitable contributions are only deductible to the extent they exceed 0.5% of adjusted gross income (AGI). 3
For example:
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AGI: $300,000
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0.5% floor: $1,500
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Only the portion of your charitable contributions above $1,500 is deductible.
The 60% AGI cap on cash contributions remains
Itemizers can generally deduct up to 60% of AGI in cash contributions to qualifying public charities. 3 Any contributions above this limit may be carried forward for up to five years. This cap applies in addition to the new 0.5% floor starting in 2026.
Example for a higher-income itemizer:
Let’s say you:
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- Have AGI of $500,000
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- Are in the 35% federal tax bracket
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- Typically donate $25,000 per year
In 2025, before the new floor applies:
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- Subject to the usual AGI limits, you may be able to deduct nearly the full $25,000.
In 2026:
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- 0.5% of AGI = $2,500
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- Only contributions above $2,500 are deductible
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- Of your $25,000 in gifts, only $22,500 may be deductible
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- Losing a $2,500 deduction at a 35% tax rate may increase your federal income tax by $875
This difference can be especially important for donor-advised fund strategies or large gifts that American Family professionals may plan as part of a broader legacy or estate plan.
Who might itemize
Usually, itemizers have:
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- AGI above the national average
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- High state and local taxes
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- Deductible expenses such as meaningful mortgage interest
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- Long-term charitable goals and multi-year giving plans
For these individuals, accelerating larger gifts in 2025 may result in a more favorable deduction position than waiting until 2026.
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Which Group Do You Belong To?
Delaying charitable giving until 2026 might be worth considering if:
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- You typically use the standard deduction
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- You give $1,000 to $2,000 or more to charities each year
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- You do not expect to itemize in 2025
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- You could shift a cash gift from December 2025 to January 2026 and potentially use the new above-the-line deduction
Giving before year-end 2025 might be more appealing if:
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- You will itemize in 2025, or already know you will have substantial itemized deductions
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- You intend to make sizable, flexible charitable gifts (for example, to a major institution or to a donor-advised fund)
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- The new 0.5% AGI floor in 2026 would reduce the amount you can deduct
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- Frontloading your giving in 2025 allows you to keep more of your charitable deduction under the current rules
How We Help Clients Make These Decisions
At Wealth Enhancement, when we review charitable planning for employees and retirees from large companies such as American Family, we consider:
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- Income tax planning under the One Big Beautiful Bill Act
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- Health care and long-term care needs
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- Multigenerational strategies and estate planning
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- Business, stock option, or liquidity events that influence annual income
We help families:
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- Evaluate the likelihood that they will itemize in both 2025 and 2026
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- Set charitable giving goals over a three- to ten-year period
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- Compare donating in 2025 versus shifting gifts into 2026
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- Coordinate planning with estate planning attorneys and certified public accountants
How The Retirement Group Can Help American Family Employees
The Retirement Group can walk through the numbers with you and design a charitable giving approach that fits within your broader retirement strategy if you are unsure whether your 2025–2026 charitable plan should involve delaying or accelerating gifts as a current or former employee of American Family.
Call (800) 900-5867 to discuss how your charitable plans fit alongside your pension, 401(k), and other retirement benefits.
Next Steps
Before you write your next year-end charitable check:
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- Confirm whether you expect to itemize or take the standard deduction.
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- Review how the upcoming 2026 rules may affect your deductions.
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- Consider whether shifting gifts into 2025 or 2026 could improve your overall tax outcome.
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Reach out to Wesley Boudreaux or Kevin Landis, CFP®, at Wealth Enhancement, and consider coordinating with The Retirement Group to determine which path best aligns with your goals as a long-term employee or retiree from American Family.
Sources:
1. Forbes Advisor. ' Standard Deductions For 2024-2025 Tax Returns And Extra Benefits For People 65+ ,' by Taylor Tepper. Oct. 8, 2025.
2. “One Big Beautiful Bill (OBBB): Impact on Charitable Giving.”
Fidelity Charitable
, 2025,
https://www.fidelitycharitable.org/articles/obbb-tax-reform.html
.
3. “Navigating Charitable Giving in the Wake of New Tax Reform.”
National Philanthropic Trust
, 30 July 2025,
https://www.nptrust.org/philanthropic-resources/philanthropist/navigating-charitable-giving-in-the-wake-of-new-tax-reform/
.
Other Resources:
1. “New Limitations on Charitable Deductions Take Effect in 2026.”
Greenberg Traurig
, 28 Oct. 2025,
https://www.gtlaw.com/en/insights/2025/10/new-limitations-on-charitable-deductions-take-effect-in-2026
2. “The OBBBA Clock Is Ticking: Why 2025 Might be the Year to Act for Maximum Charitable Deductions.”
Vanilla
, 28 Oct. 2025,
https://www.justvanilla.com/blog/obbba-year-end-charitable-planning-2026
.
3. “Charitable Organizations: Substantiation and Disclosure Requirements.”
IRS
, 30 Sept. 2025,
https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-organizations-substantiation-and-disclosure-requirements
.
What type of retirement savings plan does American Family offer to its employees?
American Family offers a 401(k) retirement savings plan to its employees.
Does American Family match employee contributions to the 401(k) plan?
Yes, American Family provides a matching contribution to employee contributions made to the 401(k) plan, subject to certain limits.
What is the eligibility requirement for American Family employees to participate in the 401(k) plan?
Employees of American Family are typically eligible to participate in the 401(k) plan after completing a specified period of service.
Can American Family employees choose how to invest their 401(k) contributions?
Yes, American Family employees can choose from a variety of investment options within the 401(k) plan to tailor their investment strategy.
What is the maximum contribution limit for American Family's 401(k) plan?
The maximum contribution limit for American Family's 401(k) plan is determined by IRS regulations, which may change annually.
Does American Family allow for catch-up contributions in the 401(k) plan?
Yes, American Family allows employees aged 50 and older to make catch-up contributions to their 401(k) plan.
How often can American Family employees change their contribution amounts to the 401(k) plan?
American Family employees can typically change their contribution amounts to the 401(k) plan on a quarterly basis or as specified in the plan documents.
Are loans available from the 401(k) plan at American Family?
Yes, American Family's 401(k) plan may allow employees to take loans against their vested balance, subject to specific terms and conditions.
What happens to my 401(k) balance if I leave American Family?
If you leave American Family, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the plan if allowed.
Does American Family offer financial education resources for employees regarding the 401(k) plan?
Yes, American Family provides financial education resources to help employees make informed decisions about their 401(k) savings.
With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
American Family Insurance provides a defined contribution 401(k) plan with company matching contributions. Employees can contribute pre-tax or Roth (after-tax) dollars, and American Family matches a percentage of eligible compensation. The plan includes various investment options, such as target-date funds and mutual funds. Financial planning resources and tools are available to help employees manage their retirement savings.
Layoffs and Restructuring: In October 2023, American Family Insurance confirmed staff reductions aimed at increasing efficiencies across its operations. The layoffs affected various positions, including leadership roles, as the company consolidates areas that provide similar functions across its multiple insurance brands (Sources: Insurance Journal, The Insurer). Financial Performance: The company reported a significant underwriting loss of $1.5 billion in 2022, attributed to inflation and high catastrophe claims. Despite these losses, American Family maintains a strong financial position with plans to reinvest in products and services (Sources: Carrier Management, AM Best). Operational Changes: The restructuring aligns with American Family's strategy to streamline processes and improve cost management, which is essential for sustaining long-term growth and delivering value to customers (Sources: Insurance Journal, The Insurer).
American Family Insurance grants RSUs that vest over time, providing shares upon vesting. Stock options are also part of their compensation, allowing employees to buy shares at a fixed price.
American Family Insurance has consistently enhanced its employee healthcare benefits to adapt to the evolving needs of its workforce. For 2023, the company maintained comprehensive medical, dental, and vision plans. These plans offer a range of services including preventive care, major dental work, and vision care, which covers eye exams, lenses, and frames. Mental health support is also a significant part of the benefits package, with access to counseling services and wellness programs designed to support employees' mental and emotional well-being. These offerings are designed to ensure that employees have access to quality healthcare, promoting a healthier work environment and improving overall productivity. In 2024, American Family Insurance continued to refine its healthcare benefits, placing a greater emphasis on flexibility and comprehensive coverage. The company introduced enhancements such as expanded mental health resources and wellness programs aimed at managing chronic conditions and preventive care. This is particularly important given the current economic and political climate, where healthcare costs are rising and the need for robust employee support systems is critical. The company also provides various options for employees to manage healthcare costs through Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). By continuously updating its benefits offerings, American Family Insurance ensures that its employees are well-supported in maintaining their health and well-being.
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