Wondering how to make the most of your giving under the new tax laws while you still have time in 2025? With significant changes taking effect in 2026, planning your charitable strategy for the rest of this year is wise stewardship.
Try these tax-smart ways to make the most of your giving this year.
- Accelerate charitable giving into 2025 – Charitable deductions will lose some value in 2026 – deductions under 0.5% of income will be disallowed, and the top 37% tax bracket’s deductions will count at only 35%. Moving up the timeline of your gifts into 2025 preserves full deductibility.
- Give appreciated assets instead of cash – Donating stocks or real estate potentially minimizes capital gains taxes while preserving full charitable deductions – keeping income lower and protecting other 2025 benefits like the senior bonus deduction.
- Use a “charitable swap” of stock – Donate appreciated stock without recognizing capital gain. Then use your cash to purchase more shares on the market.
- Leverage QCDs and IRA charitable distributions – Those age 70½+ can give directly from an IRA, avoiding income recognition and lowering AGI, which preserves benefits, like Medicare premium thresholds and the senior bonus deduction. And at age 70½ donors can make qualified charitable distributions (QCDs) of up to $108,000 annually.
- Turn IRA gifts into lifetime income – Donors can make a one-time IRA gift of up to $54,000 per person to fund a charitable gift annuity (CGA), generating lifetime income and satisfying that part of their RMD obligations.
- Name charities as IRA/401(k) beneficiaries – Leaving retirement accounts to nonprofits avoids income tax liabilities heirs would face, making these accounts ideal for charitable bequests.
- Pair Roth conversions with charitable giving – When converting IRAs to Roths (which generates taxable income), offset the tax hit by making large deductible gifts in 2025 –through donor-advised funds, CGAs, or charitable trusts – before deduction values decline in 2026.
This content was adapted from Top 10 ways to give smarter with the 2025 tax law, by Russell James, J.D., Ph.D., CFP® and is used with permission.