A Guide to Tax-Advantaged Charitable Contributions

Charitable giving is not only a powerful way to support causes you care about, but it can also offer meaningful tax advantages. With recent changes under the One Big Beautiful Bill Act (OBBBA), now is the time to reconsider charitable giving strategies.  Starting in 2026 both individuals and corporations will be subject to a “floor on charitable contributions.”   Individuals and corporations will only be able to deduct contributions that exceed a specified threshold.  Additionally, individuals in the top income tax bracket of 37% will have the benefit of their itemized deductions capped at 35%. Here’s what you need to know.

1. Use Qualified Charitable Distributions (QCDs) to Reduce Taxable Income

For individuals aged 70½ or older, QCDs allow direct transfers from IRAs to qualified charities:

• For 2025, up to $108,000 can be excluded from taxable income
• For married couples, each spouse can make QCDs up to the $108,000 limit for a potential total of $216,000
• QCDs count toward required minimum distributions (RMDs), making them a powerful tax planning tool for retirees that may not need the distribution

2. Donate Appreciated Assets and Avoid Capital Gains Taxes

Gifting assets, like stocks, that have appreciated in value can be a win-win for the donor and the organization:

• This strategy allows for a deduction at the fair market value of the asset, subject to IRS limitations
• The qualified charity is then able to sell the asset, if they choose, and not pay any taxes on the sale
• This strategy can be a win-win as the organization receives a higher contribution amount and the donor does not have to pay capital gains taxes on the appreciation of the asset

3. Pre-fund Charitable Contributions with Donor-Advised Funds (DAFs)

DAFs allow donors to front-load charitable contributions to receive immediate tax deductions.

• Contributions to DAFs are tax-deductible in the year they are made
• The assets then have the ability to grow tax-free, and recommendations are made by the donor each year to make grants to other charities in future years
• With new limits to charitable contributions and itemized deductions starting in 2026 under OBBBA, DAF contributions in 2025 are more attractive

4. “Bunching” Charitable Contributions to Maximize Deductions

• With the increased standard deduction amount becoming permanent under OBBBA, it may make sense to “bunch” two years of donations into one tax year in order to itemize deductions one year and then take the standard deduction the next
• Non-itemizers will see some benefit too: starting in 2026, individuals can deduct up to $1,000 (or $2,000 for joint filers) above the line for cash donations.

Charitable giving can be a strategic financial decision. Whether you’re an individual donor or a business owner, understanding the tax-advantaged ways to give can help you make the most of your contributions.

As always, please do not hesitate to reach out to your Wilkins Miller advisor, and we would be happy to discuss how you can make the most of your charitable giving.

Download our PDF 2025 Year-End Charitable Giving Guide.