The holiday season is a time for generosity. However, new tax rules starting in 2026 make it essential to plan your 2025 charitable giving strategically. By acting before December 31st, you can maximize tax benefits while making a meaningful impact. Here’s how to make your holiday giving tax smart.
- Act Before the December 31st Deadline
To claim a deduction on your 2025 tax return, contributions must be made by December 31st. That means:- Checks must be mailed and postmarked by 12/31
- Credit card donations count on the date the charge is made, even if you pay the credit card statement later
- Gifts of appreciated assets must have the transfer initiated by 12/31
- Itemizing vs. Standard Deduction
Charitable deductions only reduce your taxable income if you itemize your deductions. If your total deductions (mortgage interest, state and local taxes, charitable contributions, etc.) are less than the standard deduction, consider bunching your contributions:- How it works: Make two or more years’ worth of charitable gifts in a single year so your total deductions exceed the standard deduction threshold
- Using a Donor-Advised Fund (DAF): You can contribute a lump sum to a DAF this year and claim the full deduction in 2025. Then, in future years, you can recommend grants from the fund to your favorite charities. This allows you to lock in the tax deduction now while spreading out the actual giving over time
- Donating Appreciated Assets
Gifting stocks, mutual funds, or other appreciated assets you have held for more than a year can be a double win:- You avoid paying capital gains tax on the appreciation
- You may deduct the fair market value of the asset (if you itemize)
- Qualified Charitable Distributions (QCDs)
If you’re age 70½ or older, you can make donations directly from your IRA to a qualified charity — up to $108,000 in 2025. This counts toward your Required Minimum Distribution (RMD) and is excluded from taxable income, even if you do not itemize. - Keep Good Records
The IRS requires documentation for charitable deductions, including receipts for cash gifts and acknowledgments for contributions of $250 or more. For non-cash donations, you may also need an appraisal if the total amount you give exceeds $5,000 for the entire year.
Bottom Line
Whether you are motivated by generosity, tax savings, or both, strategic year-end giving can make a difference for the causes you care about and your financial picture. By planning now, you will enter the new year knowing you have maximized your impact and taken advantage of the tax benefits.