Charitable Giving Tax Strategies to Consider in 2025

Charitable giving as a tax strategy is a great way to blend generosity with practicality. In 2024, a record $590 billion was donated, likely reflecting the strength of the stock market. (1) In 2025, key changes ahead suggest that high earners in particular could benefit from strategic giving before the year’s end.

As 2026 approaches, it’s worth revisiting how charitable giving affects your U.S. taxes – while still handling your cross-border cards with care.

Below, we’ve put together a guide covering charitable giving tax strategies for 2025 and a few considerations looking to 2026, followed by a cross-border lens for Americans living abroad.

The big picture: how charitable giving affects taxes

For U.S. purposes, you generally get a deduction for gifts to qualified charities only if you itemize on Schedule A.

The most recent meaningful change to the standard deduction amount came was effective for tax year 2018 and nearly doubled the standard deduction (e.g., single from $6,500 → $12,000; MFJ from $13,000 → $24,000).

Since then, amounts have moved annually with inflation adjustments (including for 2025). Many high-income households leverage timing and asset selection to make itemizing worthwhile.

Deduction limits apply, though: gifts of cash to public charities are typically deductible up to a percentage of Adjusted Gross Income (AGI) (with a five-year carryforward for amounts above the limit), while gifts of long-term appreciated assets usually carry a different AGI limit but allow you to deduct fair market value if held more than one year.

Documentation is required, and only gifts to organizations described in §170(c) qualify.

The key takeaway here is that you don’t necessarily need to give more to give more strategically. You need to align timing, asset choice, and record-keeping.

2025 vs. 2026 at a glance

2025 (current year)

To deduct charitable gifts, you generally must itemize.

As a rule of thumb, cash gifts to most public charities are deductible up to 60% of AGI, and long-term appreciated assets (e.g., stock held >12 months) given to public charities are generally capped at 30% of AGI. Amounts above those limits can carry forward up to five years. Documentation rules (acknowledgments, Form 8283/appraisals) still apply.

Starting in 2026

Two notable changes arrive under the current law:

New 0.5% AGI floor for itemizers. Only the portion of your charitable gifts above 0.5% of AGI will be deductible (the familiar 60%/30% caps and five-year carryforward still apply on top of that floor).
Small deduction for non-itemizers. Standard-deduction filers may claim a modest above-the-line deduction for cash gifts to qualifying public charities (donor-advised funds (DAFs) and private non-operating foundations excluded).

Planning takeaway: If you usually make smaller annual gifts and itemize, the 0.5% floor may reduce 2026 deductions unless you bunch gifts or use a DAF. If you don’t itemize, 2026’s small non-itemizer deduction gives cash gifts a bit of federal tax value, but bunching plus a DAF may still be more powerful.

7 charitable giving tax strategies to consider in 2026

#1 Bunch or “stack” donations every two years

If your annual giving plus other itemized deductions rarely exceeds the standard deduction, combine two years of gifts into one tax year so you can itemize that year and take the standard deduction the next.

Many families pair bunching with property tax and mortgage interest to clear the threshold. If you prefer supporting charities on a regular cadence, contribute the lump sum to a DAF in the “bunching” year and recommend grants over time.

#2 Donate long-term appreciated assets (and avoid capital gains)

Instead of giving cash, you can donate publicly traded stock, mutual funds, or ETFs held for more than one year.

You can generally deduct the asset’s fair market value, and the built-in gain escapes capital gains tax, which can save up to 23.8% federally (plus state).

If the asset has been held one year or less, your deduction is usually limited to cost basis, and the gain doesn’t disappear. Hold the full year when you can.

When to use: concentrated positions, low-basis stock, or years when you’ve realized capital gains elsewhere.

#3 Use a Donor-Advised Fund (DAF) to separate “deduct now, give later”

A DAF lets you take an immediate deduction (subject to AGI limits) for your contribution in the year you fund the account, even if you recommend grants to operating charities in later years.

DAFs simplify gifting appreciated securities, support anonymous giving when desired, and can be helpful in windfall years (e.g., business sale, when RSUs vest, Roth conversions).

What to know: the contribution itself is irrevocable; grants must go to eligible charities.

How to set up a donor-advised fund

For most people (and most families/foundations), the right move is to open a DAF with an established sponsoring organization with support from financial planning and tax professionals who can guide strategy and compliance. Organizations such as the National Philanthropic Trust have created resources specific to this question to guide your thinking as you determine when and with whom to open your DAF. (2)

#4 Make Qualified Charitable Distributions (QCDs) from IRAs (age 70½+)

If you’re 70½ or older, you can direct up to the annual QCD limit from an IRA to a public charity.

A QCD is excluded from your income, which can be more valuable than a deduction, especially if you don’t itemize. When you reach required minimum distribution (RMD) age, QCDs can also satisfy part or all of your RMD, lowering future IRA balances.

Lower income can help with IRMAA (Medicare surcharges) and the Net Investment Income Tax in later years. Make sure the distribution goes directly from the custodian to the charity, and keep proper acknowledgments.

Mind your distributions: QCDs don’t go to DAFs, private foundations, or supporting organizations.

#5 Pair giving with capital gains/loss planning

Charitable gifts can be part of a broader realization strategy:

Offset high-gain years by donating appreciated shares and using tax-loss harvesting elsewhere.
If you’re trimming a concentrated position, donate some low-basis shares and sell higher-basis shares to rebalance.

You will want to situate these actions within the context of your broader investment plan, so your portfolio risk stays where you want it.

#6 Charitable giving in estate and legacy plans

The federal estate and gift tax exemption remains elevated through 2025 and, under the One Big Beautiful Bill Act (OBBBA), increases to $15 million per individual starting in 2026 (indexed thereafter). The charitable estate deduction remains unlimited.

Consider:

Naming a charity as beneficiary of traditional IRA dollars (often tax-inefficient to heirs but tax-efficient to charities).
Adding charitable bequests to your will or revocable trust.
Weighing lifetime giving vs. testamentary giving, depending on your taxable estate outlook and philanthropic goals.

#7 Get the paperwork right (and know the limits)

It’s important that your goodwill is substantiated by accurate paperwork. Here’s what to do:

Verify the organization using the IRS Tax-Exempt Organization Search tool (included in references below).
Keep bank records, payroll reports, and contemporaneous written acknowledgments for gifts $250+.
File Form 8283 for non-cash gifts over $500; obtain a qualified appraisal for most non-cash gifts over $5,000.
If you exceed AGI limits, track the five-year carryforward.

Charitable giving may leave you feeling rosy, but reviewing your strategy through a cross-border lens remains essential

For Americans living abroad, “what works” must be reconciled with local law:

Your host country likely does not mirror U.S. rules. Some countries don’t recognize U.S. deductions for gifts to U.S. charities, treat DAFs differently, or tax U.S. Roth accounts and IRA distributions in ways that affect your overall plan.
Treaties, where they exist, provide guidance. A few income tax treaties allow limited cross-border deductibility or special treatment for pensions; most do not. Separate estate/inheritance treaties can also change outcomes on testamentary gifts.
Where the charity is established. U.S. §501(c)(3) vs. foreign charity; if you need local deductibility, consider “friends-of” organizations or dual-qualified structures (where available) that allow tax relief in both jurisdictions.
Source, currency, and reporting. Funding gifts from foreign accounts underscores the need to be both compliant and correct on your FBAR/FATCA reporting documents; document official exchange rates and transfer history for future reference.
Plan the year, not the transaction. A U.S. deduction that increases your local taxable base (or vice versa) can erase the benefit. In high-tax countries (e.g., Germany, Portugal), modeling both returns often reveals whether to optimize locally or in the U.S.

Action step: before large gifts, sit down with a cross-border tax advisor to confirm the U.S.-side deduction rules, your local-country treatment, and review key provisions of the tax treaty (as applicable) to ensure your reporting is capturing your best angles. That’s how you avoid double-tax traps and make the impact you intend.

Quick FAQs

Is charitable giving tax-deductible if I don’t itemize?

For 2025 (current year): No, generally not. The pandemic-era above-the-line deduction for non-itemizers has expired. The main exception that reduces income without itemizing is a Qualified Charitable Distribution (QCD) from an IRA if you’re 70½ or older.

Starting with 2026 returns: Yes, but only modestly. Non-itemizers may claim a small above-the-line deduction for cash gifts to qualifying public charities (up to $1,000 (single) / $2,000 (MFJ)) with notable exclusions (e.g., no deduction for gifts to DAFs or private non-operating foundations). This provision does not replace the larger itemized-deduction regime and doesn’t allow carryforwards for non-itemizers. QCD rules are unchanged.

How much charitable giving is tax-deductible in 2025?

It depends on the asset and recipient. Cash to public charities is generally deductible up to a percentage of AGI; long-term appreciated assets to public charities have a different (lower) AGI limit. Excess carries forward up to five years. Check the current IRS thresholds and your situation.

Can I deduct gifts to GoFundMe or political causes?

No. Personal gifts, political contributions, and many crowdfunding campaigns don’t qualify as charitable contributions for U.S. tax purposes.

Do QCDs count toward my RMD?

Yes, if correctly executed directly from an IRA to a qualified charity, QCDs can satisfy part or all of your RMD for the year.

What’s better to donate, cash or stock?

If you have low-basis stock held >1 year, donating securities often delivers more tax leverage than cash because you deduct fair market value and sidestep capital gains. If you don’t itemize, QCDs (for eligible donors) may beat both.

In conclusion

In 2025, thoughtful tactics, including bunching gifts, using a DAF, donating appreciated assets, QCDs, and clean documentation, can increase your impact without increasing your out-of-pocket cost.

If you live abroad, it’s crucial to coordinate U.S. rules with your local tax system and any applicable treaties so your generosity isn’t undone by mismatched treatment.

If you’d like help modeling the options, a cross-border financial planner can build a plan that serves both your values and your taxes.

References

Additional resources:

Meet the Author

Arielle Tucker is a Certified Financial Planner™ and IRS Enrolled Agent with Connected Financial Planning. She's spent over a decade working with U.S. expats on U.S. tax and financial planning issues. She is passionate about working with U.S. expats and their families to help secure a financial future that is reflective of their core values. Arielle grew up in New York and has lived throughout the U.S., Germany, and Switzerland. Connected Financial Planning offers a complimentary introduction call for individuals and families seeking ongoing, comprehensive planning. You can schedule a call here.

Charitable Giving Tax Strategies to Consider in 2026