4 Tax-Smart Ways to Give Before December 31

Writing a check is the simplest way to give. It isn’t the only way, and it isn’t always the most tax-efficient. Depending on your age, your accounts and how you file, these four strategies may let you give the same amount to charity at a lower cost to you. Each has its own rules and deadlines, so treat this as a starting point for a conversation with your advisor and tax professional.

1. Give appreciated investments instead of cash

If you’ve held stocks, mutual funds or other investments for more than a year and they’ve grown in value, you may be able to give them directly to a qualified charity.

Why it can help: if you sold the investment first, you could owe capital gains tax on the growth. Donate the shares directly and you generally don’t pay that tax. If you itemize, you may also be able to deduct the investment’s fair market value. The charity can then sell the shares without owing tax.

What to watch: stock transfers take time. The shares have to move from your account to the charity’s before December 31 to count for 2026. Talk with your advisor and the charity in November, not the week after Christmas.

2. Make a Qualified Charitable Distribution from your IRA

If you’re 70½ or older, a Qualified Charitable Distribution (QCD) lets you send money straight from your IRA to a qualified charity. For 2026, the limit is $111,000 per person, up from $108,000 in 2025.

Why it can help: a QCD isn’t counted as taxable income. Once you reach 73 and have to take required minimum distributions (RMDs), a QCD can count toward your RMD for the year. That can help whether or not you itemize, because the benefit comes from keeping the distribution out of your income, not from a deduction.

What to watch: the money has to go directly from the IRA custodian to the charity. If the check is made out to you first, it doesn’t qualify. And QCDs can’t go to donor-advised funds.

3. Use a donor-advised fund

A donor-advised fund (DAF) works like a charitable giving account. You put in cash or investments, and if you itemize, you may be able to take a deduction that year. Then, over time, you recommend grants to the charities you choose.

Why it can help: a DAF splits the timing of your tax decision from the timing of your gifts. You can put in a larger amount in a year when it makes sense for your taxes, then give to the causes you care about at your own pace in the years after. It’s also a simple way to give appreciated investments to several charities with one transfer.

What to watch: once money goes into a DAF, it’s committed to charity. You can’t take it back. Sponsoring organizations also set their own fees, minimums and processing timelines.

4. “Bunch” several years of giving into one

For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. If your itemized deductions, charitable gifts included, don’t add up to more than that, your gifts may not lower your taxes at all.

Bunching means combining two or more years of planned giving into one year. That year, your itemized deductions may clear the standard deduction. In the off years, you take the standard deduction. Many people pair bunching with a donor-advised fund so the charities they support still get steady grants every year.

Here’s a hypothetical example, for illustration only. A married couple gives $10,000 a year to charity and has $20,000 in other itemized deductions. Each year, their $30,000 total falls short of the $32,200 standard deduction. If they give $20,000 every other year instead, their itemized total in the giving year would be $40,000. This example ignores other tax factors, including any new limits on itemized charitable deductions, and isn’t a projection of anyone’s results.

What’s new in 2026: a deduction for non-itemizers

Starting in 2026, people who take the standard deduction may also deduct up to $1,000 of cash gifts to qualifying charities, or $2,000 for married couples filing jointly. The gifts must be cash, not investments, and gifts to donor-advised funds don’t count. If you itemize, other new rules may affect your charitable deduction, so this is a good year to go over your numbers with a tax professional.

Your next step

The right strategy depends on your age, your accounts and your tax situation, and many people use more than one. Our free Charitable Giving Strategies Guide covers each option in more detail, including how to build giving into your estate plan.

Get the Charitable Giving Strategies Guide

Ready to look at your own numbers? Book a year-end giving review with your CWA advisor. Start early and you’ll have more options before December 31. Call us at 717-975-8800.

Sources: IRS Notice 2025-67 (2026 QCD limit); IRS tax inflation adjustments for tax year 2026 (standard deduction); IRS One Big Beautiful Bill provisions (non-itemizer deduction).

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax or legal advice. Individual tax or legal matters should be discussed with your tax or legal professional.

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