(This is a partial video recording due to technology issues on the webinar platform)

Every month, our Tax Tuesday sessions bring together taxpayers, business owners, retirees, and high-income earners who want to feel confident—not confused—about their taxes. This month’s topic is one of the most valuable and time-sensitive tax planning areas:

👉 Year-End Charitable Giving & Deduction Strategies

If you’re planning to give to charitable organizations before December 31—or you want to minimize taxes in a smart, intentional way—this deep-dive guide will help you understand the rules, avoid IRS pitfalls, and use proven strategies to maximize your deduction.

⭐ Why Year-End Tax Planning Is So Important

One of the biggest misconceptions we see is that tax planning happens in April.
Unfortunately… it doesn’t.

Once December 31 passes, most of your best tax-saving opportunities are gone.

Here’s what you cannot change after January 1:

• Most charitable contributions

• Mileage records

• Home office documentation

• S-Corp reimbursements

• HSA contributions (unless payroll-funded)

• Equipment placed “in service”

• Year-end income thresholds

• AGI-based strategies (QCDs, medical deductions, IRMAA brackets)

Only a few things can be done after year-end:

• Certain retirement contributions (401(k), IRA, SEP IRA)

• Some business retirement plans (if the plan was established in time)

Everything else?
Your tax outcome is locked in.

This is why November and December are the most important months for tax planning.

⭐ Standard Deduction vs. Itemizing: The Starting Point for Charitable Giving

Before you can understand how charitable contributions work, you must first determine:

Will you itemize or take the standard deduction?

✔ 2024–2025 Standard Deduction Amounts

• Single: ~$15,000

• Married Filing Jointly: ~$30,000

Why this matters:

If your itemized deductions (mortgage interest, property taxes, charitable giving, medical, etc.) do not exceed the standard deduction, your charitable giving won’t reduce your taxes.

This is the #1 reason many generous donors receive no tax benefit—not because their giving isn’t noble, but because they didn’t plan the timing correctly.

✔ Major Update: SALT Cap Increased to $40,000

A major change under the new tax legislation:

• State & Local Taxes (SALT) cap increased from $10,000 → $40,000

If you:

• Own a home

• Pay high property taxes

• Live in a medium–high tax area

…you may suddenly be able to itemize again.
This potentially re-opens the door for charitable giving deductions.

⭐ What Counts as a Charitable Contribution (and What Does NOT)

To be deductible, the donation must go to a qualified 501(c)(3) organization.

❌ The following do not qualify:

• GoFundMe pages

• Donations to individuals

• Political campaigns

• Venmo donations (unless the organization verifies 501(c)(3) status)

• Social clubs, HOAs, or booster clubs that lack nonprofit designation

If you are unsure, use the IRS Exempt Organization Lookup tool.

⭐ Documentation: The IRS Requires Proof

Every year, we see perfectly legitimate charitable deductions get denied—not because they weren’t real, but because taxpayers lacked documentation.

The IRS will accept:

• Donation receipts

• Bank statements

• Credit card confirmations

• End-of-year giving statements

• Appraisals for non-cash gifts over $5,000

• Vehicle donation forms

Tip: Keep all documentation for at least 3 years while the return is open for audit.

⭐ Strategy 1: The “Bunching” Method (Huge for Middle-Income Taxpayers)

The bunching strategy allows you to combine multiple years of charitable giving into one tax year to exceed the itemization threshold.

Example:

You normally donate:

• $10,000 each year

But the standard deduction is $30,000.

If you donate:

• $20,000 in one year (covering this year + next year)

Your itemized deductions may exceed the standard deduction—unlocking significant tax savings.

This strategy works especially well for:

• Individuals with low or no mortgage interest

• Retirees

• Households managing Medicare IRMAA brackets

• Taxpayers with fluctuating income

⭐ Strategy 2: Donor-Advised Funds (DAFs)

A Donor-Advised Fund is one of the most tax-efficient charitable giving tools available.

✔ What is a DAF?

It’s an investment account for charitable giving.
You contribute now (and get the deduction now), and donate the funds to specific charities later—next month, next year, or over many years.

Benefits:

• Immediate tax deduction

• You choose charities later

• Can accept appreciated stock and crypto

• Can be invested for growth

• Great for year-end planning

Perfect for:

• High-income years

• Business sale events

• Stock compensation windfalls

• Taxpayers using the bunching strategy

⭐ Strategy 3: Donate Appreciated Assets Instead of Cash

This is one of the biggest tax-saving opportunities that most people miss.

If you:

• Sell stock

• Pay capital gains

• Then donate the cash

…you are giving away tax savings.

Instead:

Donate the shares directly to the charity or DAF.

Double benefit:

1. Deduct the full fair-market value

2. Avoid ALL capital gains tax

Example:

• Bought stock for $1,000

• Now worth $10,000

Donate directly and you:

• Deduct $10,000

• Avoid tax on $9,000 of gains

• Save ~$3,000+ in taxes

You can donate:

• Stocks

• ETFs

• Mutual funds

• Crypto

• Real estate

• Business interests (requires appraisal)

⭐ Strategy 4: Qualified Charitable Distributions (QCDs)

If you or your parents are over 70½, QCDs are extremely powerful.

✔ What is a QCD?

A Qualified Charitable Distribution sends money directly from a traditional IRA to a charity.

Benefits:

• Counts toward your RMD

• NOT included in taxable income

• Reduces AGI (which affects Medicare, Social Security taxation, credits)

• Reduces your taxable estate

• Allows you to give even if you take the standard deduction

Limits (2025):

• $108,000 per person

• $216,000 per married couple

Important:

• Must come directly from the custodian

• Cannot go to DAFs or private foundations

• Cannot use Roth IRA funds

⭐ Strategy 5: Charitable Giving for Business Owners

C-CORPORATIONS:

✔ Can deduct charitable contributions
✔ Limited to 10% of taxable income

S-CORPS & PARTNERSHIPS:

❌ No deduction at the business level
✔ Contributions flow to the owners via Schedule K-1

The Sponsorship Trick

Business owners often miss out on deductions because they label sponsorships as “charitable.”

Example:

• Donating uniforms to a kids’ sports team

• Sponsoring a school event

• Advertising at a nonprofit event

This is typically a marketing deduction—not charitable giving—and can be more beneficial.

⭐ Strategy 6: Non-Cash Donations (Clothes, Furniture, Vehicles)

You can deduct non-cash contributions such as:

• Clothing

• Furniture

• Appliances

• Cars

• Household items

• Medical devices

Rules:

• Must be “good or better” condition

• Must use fair market (thrift shop) value

• Must have a detailed list

• Items > $500 require Form 8283

• Items > $5,000 require an appraisal

⭐ Major 2026 Tax Law Changes (OBBB Act)

These changes start in 2026 and significantly impact charitable giving.

For Non-Itemizers:

• New deduction:

  • $1,000 single / $2,000 married filing jointly

• Cannot be used for:

  • DAFs

  • Private foundations

For Itemizers:

• New 0.5% AGI “floor” before charitable giving becomes deductible

• High-income taxpayers capped at a 35% deduction value

• Corporate giving subject to a new 1% income floor

Bottom line:
2025 is the last “normal” year to use charitable giving under current rules.

⭐ Your Year-End Tax Planning Checklist

Screenshot this list:

• Decide whether you will itemize or take the standard deduction

• Finish all charitable giving by December 31

• Consider using a Donor-Advised Fund

• Donate appreciated stock instead of cash

• Verify whether parents qualify for QCDs

• Gather receipts and documentation now

• Business owners: classify sponsorships correctly

• Review home office, mileage logs, and S-Corp accountable plans

• Max out retirement/HSA contributions

• Ensure equipment is placed in service before year-end

• Make sure your books are up to date

⭐ Need Help? We’re Here for You.

If you’d like help designing your charitable giving strategy—or putting together a year-end plan tailored to your situation—we would love to help.

📅 Register for future Tax Tuesday webinars:
https://molentax.com/webinars