Trying to maximize your charitable giving for 2025?

The new tax law passed by Congress, the One Big Beautiful Bill Act (OBBBA), made changes to charitable giving that will take effect in 2026. Starting in 2026, charitable donations must exceed .5% of adjusted gross income (AGI) to be deductible. For example, if a taxpayer has $100,000 AGI and $5,000 in charitable giving, the first $500 of their charitable giving would be non-deductible, and the remaining $4,500 would be deductible.

Other ideas to optimize your charitable giving for 2025:

1. Are you over 70 ½? If you are over 70 ½ with an eligible IRA account, you can make a Qualified Charitable Distribution (QCD) from an IRA. This reduces your taxable income, and if you’re over 73, this can count towards your mandatory IRA withdrawals for the year.
2. Consider donating stock. The full market value of the stock donated is eligible to be itemized, and capital gains tax on the appreciated value of the stock can be avoided.
3. Bunch gifts from year to year. With the .5% of AGI threshold limitations beginning in 2026 and higher standard deductions in 2026, consider bunching donations into a single year (instead of spreading across years) to maximize tax benefits.

The ITA does not provide tax or legal advice. This information is general and educational in nature and should not be considered legal or tax advice. Consult a tax advisor for strategies that are specific to your situation.