As the holidays approach, you may be thinking about giving — not just to your loved ones, but also to your community and the causes that you care about.
With new federal tax rules taking effect in 2026, this year may be a meaningful time to review your charitable plans. Understanding what’s changing can help you decide when and how to give in a way that fits your goals.
Whether you support a favorite local charity, set up a donor-advised fund, or use your IRA for charitable gifts, there are many ways to make an impact this season — and have it count toward your 2025 return.
What’s Changing for Charitable Giving in 2026?
Under today’s rules, itemized charitable deductions aren’t subject to an AGI floor, and higher marginal rates mean deductions can offset more taxable income. Both provisions are expected to change in 2026, which is why you may choose to give in 2025 instead.
Here’s a quick look at what’s expected to change in 2026:
- New AGI “floor.” Only the portion of your donations above 0.5% of your adjusted gross income (AGI) will qualify for a federal deduction.
- Lower cap for high earners. The top deduction rate will decrease from 37% to 35%.
- Small deduction for non-itemizers. If you don’t itemize, you’ll be able to deduct up to $1,000 (single) or $2,000 (joint) — a modest but permanent benefit starting in 2026.
📖 Adjusted Gross Income (AGI) — Your total income minus specific deductions, used to determine how much of your charitable giving can be deducted.
💡 Tip: “Bunching” several years of donations into 2025 could help you exceed the new AGI threshold and take a larger deduction now while still spreading grants to charities over time.
❗Note: Tax rules can change, and individual situations vary. Consider talking with your tax professional.
How to Give Before December 31 — and Make It Count
There’s no single right way to give — and you don’t need a big budget or a complex plan to make a difference. Here are a few ways you can give before year-end:
Give Cash or Appreciated Assets
The simplest way to donate is cash — but appreciated investments (like stocks or mutual funds) can stretch your gift even further.
If you donate long-term appreciated securities (held >1 year):
- You may avoid capital gains tax, and
- You might be able to deduct the fair market value of the donation.
📌 Learn more about Tax Planning and how charitable strategies can help reduce taxable income.
Use a Donor-Advised Fund (DAF)
A donor-advised fund (DAF) works like a charitable investment account. You make a donation this year, receive an immediate deduction, and then recommend grants to charities later — even years down the road. It’s a flexible choice if you want to use the 2025 rules but need time to choose recipients.
💡 Tip: A DAF can be a simple way to involve kids or grandkids in choosing charities together.
📌 Explore how Financial Planning can align your giving with your overall goals.
Turn RMDs Into QCDs
If you’re 70½ or older, you can donate directly from your IRA through a Qualified Charitable Distribution (QCD) — up to $108,000 in 2025. Additionally, if you are 73 or older, this amount counts toward your required minimum distribution (RMD) but isn’t taxed as income.
QCDs can also help some retirees:
- Reduce exposure to higher Medicare Part B/D premiums,
- Lower taxes on Social Security benefits, and
- Support causes that matter most in retirement.
❗Note: The transfer must go directly from your IRA custodian to a qualified public charity; DAFs and private foundations aren’t eligible recipients; SEP/SIMPLE IRAs generally don’t qualify if employer contributions were made that year.
📌 See how Retirement Planning and charitable giving can work hand in hand.
Consider a Charitable Trust
If you are thinking long-term, a charitable trust can provide both income and impact.
- Charitable Remainder Trust (CRT): Pays income to you or your heirs for life or a set term; the remainder goes to charity.
- Charitable Lead Trust (CLT): The charity receives income first; remaining assets later pass to your beneficiaries.
These tools may help reduce estate and gift taxes while supporting organizations for years to come (they require legal/tax guidance).
📌 Learn more about Estate Planning and how charitable strategies can shape your legacy.
Ways to Check That a Charity Is Legitimate
Before donating, take a few minutes to confirm the organization is legitimate and that your gift will be used as intended.
- Look for a clear mission statement and evidence of current programs or community work.
- Confirm the charity is recognized as a qualified 501(c)(3) in its materials or tax acknowledgment letter.
- Review its annual report or financial summary (most reputable nonprofits share these on their own sites).
- Be cautious of high-pressure requests, urgent demands for immediate payment, or appeals that don’t provide documentation.
📖 501(c)(3) — A nonprofit recognized by the IRS as tax-exempt and eligible to receive tax-deductible donations.
💡 Tip: Keep your receipts. For larger donations, request a written acknowledgment that includes the amount and confirms whether you received any goods or services in return.
What Questions Should You Ask About Year-End Charitable Giving?
“How do charitable donations affect my taxes in 2025?”
If you itemize deductions, your charitable gifts can still reduce taxable income this year. In 2026, new limits will take effect — including a minimum AGI floor and a reduced deduction rate for higher earners.
“Do I have to itemize to get a tax break for donations?”
Yes, for 2025. Itemizing is required to claim charitable deductions this year. Beginning in 2026, smaller above-the-line deductions will return for non-itemizers.
“Can I donate through my business or company?”
Yes. Businesses can deduct up to 10% of taxable income for charitable contributions under the 2025 rules. In 2026, a new 1% floor will limit the types of gifts that qualify.
“Can I deduct volunteer work or donated time?”
Your time isn’t deductible, but related out-of-pocket costs (such as mileage or supplies) may qualify.
“When is the last day to make a tax-deductible donation?”
December 31, 2025. Mailed checks must be postmarked by that date, and online donations need a 2025 transaction date. For gifts of securities, many custodians have mid-December processing cutoffs.
📌 Read our blog post - Charitable Gifting Made Easy: Strategies for the Season of Giving
How to Make Your Generosity Count This Season
Giving is about more than numbers, and no matter how much you choose to give this year, what is important is the impact that it creates — in your community, in the lives of others, and in you.
If you’d like to review your charitable giving plan, we’re happy to help you explore options that fit your goals, family, and budget. Schedule a complimentary introductory meeting with our team in Glastonbury or Wilton, Connecticut, to talk about year-end giving strategies.
Tom Hine is a CERTIFIED FINANCIAL PLANNER® professional and owner of Capital Wealth Management. With over 30 years of experience, Tom works with individuals and families on financial planning, retirement strategies, and investment management. He has a particular passion for special needs financial planning, shaped by his personal experience helping raise his sister Amy, who was born with a severe chromosomal condition. Tom understands the emotional and financial challenges that come with caring for a loved one with disabilities and helps clients navigate complex issues like preserving government benefit eligibility, coordinating Special Needs Trusts and ABLE accounts, and long-term care planning. With offices in Glastonbury and Wilton, CT, Tom serves clients across Connecticut and throughout the U.S. Schedule a complimentary introductory meeting with Tom.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. RMD's are generally subject to federal income tax and may be subject to state taxes. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.
Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes.