As the holiday season reaches its peak, many of us feel that familiar pull to give back. Whether it’s writing a check to a favorite nonprofit, dropping toys in a donation bin, or tipping service workers extra generously, December is traditionally the month of giving.
But this year is different. Thanks to provisions in the One Big Beautiful Bill Act passed earlier in 2025, the tax landscape for charitable contributions is more favorable than it has been in decades—especially for itemizers. With only a week left before the calendar flips to 2026, now is the perfect time to turn generous impulses into smart tax strategy.
Here’s why 2025 stands out, followed by five proven strategies you can still use before December 31 to maximize your deductions and amplify your impact.
Why 2025 Is a Sweet Spot for Charitable Deductions
1. Higher State and Local Tax (SALT) Cap: The new law temporarily raises the SALT deduction cap to $40,000 for many taxpayers (up from the previous $10,000 limit). This gives itemizers far more room to bunch property taxes, state income taxes, and charitable contributions without hitting the cap as quickly.
2. Strong Itemizing Incentives Remain: Standard deductions are rising again in 2026 ($16,100 single / $32,200 joint), but they’re still at 2025 levels ($15,750 / $31,500). That narrower gap makes itemizing worthwhile for more people this year—especially if you bunch deductions.
3. No Major Rollbacks (Yet): While some provisions sunset or phase down after 2025, the core rules for charitable deductions remain robust through year-end. Don’t assume next year will be as friendly.
The result? Strategic donors can deduct more, pay less tax, and direct even greater resources to causes they care about.
5 Strategies to Maximize Charitable Deductions Before Year-End
1. Bunch Multiple Years of Donations into 2025
“Bunching” means combining two or more years’ worth of planned gifts into a single tax year to push your itemized deductions above the standard deduction threshold.
• Example: If you normally give $10,000 annually, consider donating $20,000–$30,000 now. You itemize in 2025 (big deduction), then take the standard deduction in leaner years.
• Pro tip: Use a Donor-Advised Fund (DAF) (see strategy #4) to bunch the deduction now while distributing grants to charities over time.
2. Donate Appreciated Stock or Assets Instead of Cash
Gifting long-term appreciated securities (held >1 year) is one of the most tax-efficient moves available.
• You deduct the full fair market value on the date of transfer.
• You avoid paying capital gains tax on the appreciation.
• Example: Shares bought years ago for $10,000 now worth $30,000? Donate them directly—deduct $30,000 (subject to limits) and skip the ~$4,000–$6,000 capital gains bill you’d owe if you sold first.
Most major brokers (Fidelity, Schwab, Vanguard) make direct transfers to charity seamless.
3. Use Qualified Charitable Distributions (QCDs) if You’re 70½ or Older
If you have a traditional IRA and are at least 70½, you can transfer up to $108,000 directly to qualified charities in 2025—tax-free.
• The QCD counts toward your Required Minimum Distribution (RMD) (mandatory at age 73).
• The amount never hits your taxable income—perfect for lowering AGI and avoiding Medicare premium surcharges.
Even if you don’t itemize, QCDs deliver powerful tax savings.
4. Open or Contribute to a Donor-Advised Fund (DAF)
A DAF lets you make a large irrevocable contribution now, claim the deduction immediately, and recommend grants to charities later.
• Ideal for bunching without deciding exact recipients before year-end.
• Many sponsors (community foundations, Fidelity Charitable, Schwab Charitable) allow quick online setup and same-day funding.
5. Prepay 2026 Pledges Before December 31
If you’ve already pledged support for 2026 (church, university, nonprofit campaign), consider paying part or all of it in 2025.
As long as the charity provides goods or services of only nominal value in return, the payment is deductible this year—even if it applies to next year’s pledge.
Final Thoughts: Give Generously, Save Wisely
The combination of holiday spirit and favorable 2025 tax rules creates a rare alignment: You can make a meaningful difference for causes you love while keeping more of your hard-earned money out of Uncle Sam’s hands.
But the window closes fast. Contributions must be completed (mailed checks postmarked, electronic transfers initiated, securities delivered) by midnight on December 31 to count for 2025.
Not sure which strategy fits your situation best? Run the numbers with your tax advisor this week. A few hours of planning now could translate into thousands in savings—and thousands more reaching the people and organizations that need it most.
Happy holidays, and happy (strategic) giving!
Disclaimer: This article is for general information only and not personalized tax advice. Consult a qualified tax professional for your specific circumstances.
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