As we head into year-end, many families are thinking about charitable giving, not just as a way to support causes they care about, but as part of a broader tax strategy.
That timing matters more than usual this year. Under current law, the tax treatment of charitable gifts is scheduled to change next year, including a new “floor” that makes it harder to turn smaller or more casual donations into meaningful tax deductions. In plain English: going forward, you may need to give more, or at least more strategically, before your donations actually move the needle on your tax bill.
That doesn’t mean you should give solely for the write-off. But if you’re already charitably inclined, it does mean this year is a good time to be intentional:
- Consider bunching gifts. Instead of spreading donations evenly every year, some families are choosing to “bunch” several years’ worth of giving into this year to maximize today’s rules, then dial back in future years.
- Look at appreciated investments. Donating stock or funds that have grown significantly can let you avoid capital gains tax and take a charitable deduction, while the charity receives the full value.
- Use donor-advised funds (DAFs). A DAF lets you take a deduction in the year you fund it, then make grants to charities over time. That can be a powerful way to lock in current rules while still giving thoughtfully in future years.
- Coordinate with your broader plan. If you’re already thinking about retirement income, RMDs, or legacy planning, charitable tools—like qualified charitable distributions (QCDs) from IRAs once you’re eligible—can help support causes and manage your tax picture.
The bottom line: if you’re planning to give anyway, this may be a “measure twice, cut once” year. The same dollars, structured a little differently, can have a bigger impact for both your favorite organizations and your long-term plan.
If you’d like to walk through how these changes might affect your situation and what smart giving could look like for you this year, we’re here to help.