Charitable Contributions: Act Before December 31, 2025!
Sue Schnitz
Charitable Giving Deadline: December 31, 2025
As the year draws to a close, many of us feel inspired to make a difference. Whether you're passionate about supporting a local cause or making a global impact, the end-of-year period presents a unique opportunity. But to ensure your contributions count for the 2025 tax year, it's crucial to act before December 31. Whether you're sending checks (as long as they’re postmarked by the deadline), making online contributions that are date-stamped, or donating by credit card, the time to give is now.Understanding Tax Benefits
Beyond the joy of giving, charitable donations come with significant tax benefits. If you itemize deductions, you may deduct up to 60% of your adjusted gross income for cash donations. Even non-cash assets, like appreciated stocks and household goods, offer perks. Not only do these donations potentially avoid capital gains taxes, but they also allow you to claim their full value. Additionally, for individuals aged 70½ or older, Qualified Charitable Distributions (QCDs) offer a way to donate up to $108,000 tax-free from an IRA. This might help meet Required Minimum Distributions (RMDs) starting at age 73.Steps to Maximize Your Charitable Impact
To ensure you harness the full advantage of your generosity, start by confirming the IRS-qualification of your chosen charity. The IRS Tax Exempt Organization Search tool can help with this. Documentation is key, so keep a written acknowledgment for gifts of $250 or more, and bank records or receipts for smaller donations. If you're considering non-cash donations, doing so rather than giving cash could offer larger tax benefits.Thinking Strategically About Giving
Considering when to donate can also amplify the benefits. For those experiencing a higher-than-average income year, contributing now might be particularly wise. The "bunching" strategy, which involves combining donations into a single tax year, can help exceed the standard deduction threshold, making itemizing potentially more valuable. Year-end charitable contributions not only reduce your tax burden but also signify the impact you wish to have in the world. With the December 31 deadline rapidly approaching, there's no better time to act. If you’re uncertain about the best course of action for your finances, consulting with a financial professional can provide clarity and direction. There's still time to make a meaningful difference—both for your community and your tax return.