Charitable Giving: Maximize Tax Benefits by December 31

Make a Difference Before the Year Ends

The holiday season brings a special opportunity to reflect on the past year and give back to causes that matter to you. With December 31, 2025, fast approaching, it's an excellent time to make your charitable contributions. Not only can you make a significant impact in the communities and organizations you cherish, but you can also benefit your own financial situation by reducing your 2025 tax bill.

Emphasize the December 31, 2025, Deadline

It's crucial to remember that for your charitable contributions to count towards this year's tax deductions, they must be made by December 31, 2025. Whether you're mailing a check, making a credit card donation, or giving online, ensure the transaction is completed by this date to qualify for the 2025 tax year.

Discuss the Tax Benefits of Charitable Giving

If you itemize deductions on your tax return, you could be eligible to deduct up to 60% of your adjusted gross income for cash donations. Beyond cash, donating non-cash items like household goods or appreciated stocks not only supports great causes but also helps you avoid capital gains taxes, allowing you to claim the full value of the asset. For those 70½ or older, using a Qualified Charitable Distribution (QCD) is a savvy way to give up to $108,000 from an IRA tax-free, which can also help satisfy your required minimum distributions starting at age 73.

Offer Practical Steps to Maximize Benefits

To ensure you're optimizing your giving, take these practical steps:

• Confirm the charity is IRS-qualified. You can use the IRS Tax Exempt Organization Search tool to verify.
• Keep detailed documentation: get written acknowledgment for any gifts $250 or more, and retain bank records or receipts for smaller donations.
• Consider donating appreciated assets instead of cash for potentially bigger tax breaks.
• Evaluate your financial situation—if this year's income is higher, it might be more beneficial to give now.
• Think about using the “bunching” strategy, which involves combining donations into a single year to exceed the standard deduction and take advantage of itemizing.

Year-end charitable giving offers you the dual benefit of personal tax savings and the opportunity to make a real difference in the world. With the December 31 deadline just around the corner, now's the time to act. If you're unsure about how much to give or how it might impact your tax return, be sure to give us a call to discuss. There's still time to make a meaningful impact before the year ends.