As we reach the halfway point of the year, now is a great time to review opportunities that could reduce your tax bill before December 31. One area that is often overlooked is charitable giving. Whether you donate cash, appreciated investments, or funds directly from an IRA, thoughtful planning can help you support the causes you care about while potentially increasing your tax savings.

Here are several charitable giving strategies to consider during your mid-year financial checkup.

Review Whether You Will Itemize Deductions

For many taxpayers, charitable contributions provide a tax benefit only if they itemize deductions rather than claim the standard deduction. If you expect to itemize this year, now is a good time to estimate your charitable contributions and determine how much tax savings they may generate.

Beginning in 2026, taxpayers who do not itemize may once again be eligible for a charitable deduction of up to $1,000 for single filers and $2,000 for married couples filing jointly. While the deduction is limited, it may benefit taxpayers who have not been able to deduct charitable gifts in recent years.

Consider Donating Appreciated Investments:

Many investors automatically write checks to their favorite charities, but donating appreciated stock can often provide a greater tax benefit.

If you have investments that have increased in value and have been held for more than one year, donating those shares directly to charity may allow you to:

• Receive a charitable deduction for the fair market value of the stock.
• Avoid paying capital gains tax on the appreciation.

This strategy can be especially effective for taxpayers with concentrated stock positions or investments that have experienced significant growth.

Don’t Forget About IRA Charitable Giving

Taxpayers age 70½ and older may be able to make a Qualified Charitable Distribution (QCD) directly from an IRA to a qualified charity.

A QCD can:

• Count toward your Required Minimum Distribution (RMD)
• Be excluded from your taxable income.
• Provide a tax benefit even if you do not itemize deductions.

For many retirees, this is one of the most tax-efficient ways to support charitable organizations.

Understand the Limits

Most cash donations to public charities are deductible up to 60% of your adjusted gross income (AGI).

If you donate appreciated investments, such as stocks held for more than one year, the deduction is generally limited to 30% of AGI. Any excess deduction may typically be carried forward for up to five years.

While most taxpayers never reach these limits, they can become important when making large charitable gifts as part of a tax or estate planning strategy. Reviewing your expected income and planned donations before year-end can help maximize the tax benefit of your charitable contributions.

Keep Good Records

The IRS requires documentation for all charitable contributions.

For cash donations, keep:

• A bank record, canceled check, or credit card statement
• A receipt or written acknowledgment from the charity

For donations of $250 or more, a written acknowledgment from the charity is required. Additional rules apply to donations of vehicles and other non-cash property. Large non-cash donations may require a qualified appraisal.

The Bottom Line

Charitable giving is about more than supporting worthy causes—it can also be an important part of your overall tax and financial plan. Reviewing your charitable giving strategy now gives you time to evaluate options, maximize tax benefits, and make any adjustments before year-end.

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