Justin Bennitt, Financial Planner
December 10, 2025
As year-end approaches, the tradition of giving is highlighted by the Holidays. While it not only feels good to give from the emotional perspective, but there are also financial benefits as well that can impact the giver as much as the receiver in positive ways. I will outline a few strategies where charitable giving can positively impact your 2025 taxes and end the year on a giving note.
The first is to give charitable contributions to a qualified 501(c)(3) and is the most obvious and easiest to employ because it reduces your taxable income and is not an itemized deduction. As a reminder, the standard deduction in 2025 for single filers is $15,000 and for married filing jointly it is $30,0000. Those that itemize deductions on their taxes should be cognizant of what those items are and if they total above the standard deduction. If they do not, it may make sense to wait every two or three years to bunch those charitable contributions together to fully realize those deductions.
A second option is to donate appreciated assets such as stock positions, real estate or other investments that have increased in value. By doing this, you are avoiding capital gains taxes and can deduct the full market value. If you sell the asset yourself, then give the proceeds, you are paying capital gains tax and the charity is only receiving the net donation, not the gross donation. Further, since charities are not taxed, they can fully utilize the amount of the gift, not just an after-tax portion.
Utilizing a Donor Advised Fund (DAF) is a third option and works well in a scenario where you are using one year to bunch and maximize deductions to spread across many years. DAF’s also allow you to donate complex assets like business interests. Given there is a chance that itemized deductions will be limited to 80% of Adjust Gross Income (AGI) in 2026 and beyond, this is seriously something to consider before year end.
Another option is to donate household goods like furniture, vehicles, or cryptocurrency. For gifts of over $5,000 be sure and get a proper appraisal and keep receipts from your donation. You can combine this with tax loss harvesting – selling stock positions that have a loss to offset gains – then donate the cash.
Finally, if you are over the age of 70 ½, you can transfer up to $105,000 directly from your IRA to a charity tax free. This counts toward your Required Minimum Distribution (RMD) but is not included in your Adjusted Gross Income. This could potentially lower your Medicare Premiums or other taxes.
As discussed, there are numerous ways in which you can give to charities and receive the tax benefit for doing so. As deductions may change in 2026 moving forward, it may be advantageous to act in this tax year as opposed to a later one.
From all of us at Blue Rock to all of you, we wish you all a Happy Holiday Season and a Joyous New Year!