(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:
Deduct the full fair-market value
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
