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Charitable Giving Tax Strategies to Consider in 2025-2026

Giving to charity not only makes a positive philanthropic impact, but also can reduce your tax burden.

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Updated Oct 11, 2025 · 2 min read

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Strategy 1: Consolidate donations into high income years

In some years you may produce more income than in others (if you receive a big bonus or happen to sell a business, for example). Instead of making smaller annual donations, consider combining a few years’ worth of donations into one larger donation during those high-income years.

How it helps you save: By grouping donations, you can itemize during the high-income year and take the standard deduction during other years. The maximum income tax deduction for charitable contributions is 50% of your adjusted gross income each year, but in some cases lower limits might apply.

How it helps you save: How it helps you save: By grouping donations, you can itemize during the high-income year and take the standard deduction during other years. The maximum income tax deduction for charitable contributions is 50% of your adjusted gross income each year, but in some cases lower limits might apply. ? Nerdy Tip

In the 2025 tax year (the tax return you file by April 15, 2026), you have to itemize in order to deduct charitable contributions on your taxes. But the rules change for the 2026 tax year (this pertains to the tax return you file by April 15, 2027):

People who don't itemize on their tax returns can deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions. This means they can take the deduction for the 2026 tax year on the tax return that they will file in 2027.

People who don't itemize on their tax returns People who don't itemize on their tax returns People who don't itemize on their tax returns can deduct up to $1,000 (single) or $2,000 (married filing jointly) in charitable contributions. This means they can take the deduction for the 2026 tax year on the tax return that they will file in 2027.

People who do itemize on their tax returns must donate an aggregate total of at least 0.5% of their adjusted gross income to charity in order to claim the deduction.

People who do itemize on their tax returns People who do itemize on their tax returns People who do itemize on their tax returns must donate an aggregate total of at least 0.5% of their adjusted gross income to charity in order to claim the deduction.

» MORE: Learn what a wealth manager does and whether you need one

» MORE: » MORE: » MORE: Learn what a wealth manager does and whether you need one

Strategy 2: Donate highly appreciated assets

If you have assets that have appreciated a lot over time, such as stocks or real estate, donating them may mitigate capital gains tax, income tax and estate tax.

If you have assets that have appreciated a lot over time, such as stocks or real estate, donating them may mitigate capital gains tax , income tax and estate tax .

How it helps you save:

How it helps you save: How it helps you save:

Selling assets at a profit could generate a big capital gains tax bill. Donating these assets to charity can help avoid that big tax bill.

You may also get a deduction for the full appreciated value of the asset, which can reduce your income tax bill

You may also get a deduction for the full appreciated value of the asset, which can reduce your income tax bill IRS.gov. Publication 526, Charitable Contributions. Accessed Oct 11, 2025. .

Donating highly appreciated assets can help keep the size of your overall taxable estate below the estate tax threshold. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026.

» Estate planning? Start with our 7-step guide.

» Estate planning? Start with our 7-step guide » Estate planning? » Estate planning? Start with our 7-step guide Start with our 7-step guide .

Strategy 3: Use a donor-advised fund

You can donate cash or other assets to a donor-advised fund (DAF), where the assets can continue to grow tax-free and you can recommend fund disbursements over time to the causes and organizations you care about. Many brokerage firms or local community foundations can establish a DAF for you.

You can donate cash or other assets to a donor-advised fund (DAF) , where the assets can continue to grow tax-free and you can recommend fund disbursements over time to the causes and organizations you care about. Many brokerage firms or local community foundations can establish a DAF for you.

How it helps you save: Donating through a DAF gives you an immediate income tax deduction in the year you contribute the assets, even if the DAF plans to disburse the assets to charity over several years. The donation can also reduce the size of your taxable estate, possibly reducing estate taxes later. Also, you could deliberately time your contribution to a DAF to coincide with a high-income year to get a more valuable tax deduction.

How it helps you save: How it helps you save: Donating through a DAF gives you an immediate income tax deduction in the year you contribute the assets, even if the DAF plans to disburse the assets to charity over several years. The donation can also reduce the size of your taxable estate, possibly reducing estate taxes later. Also, you could deliberately time your contribution to a DAF to coincide with a high-income year to get a more valuable tax deduction.

Strategy 4: Roll distributions over to charity

Retirees with traditional IRA accounts must take required minimum distributions after age 72. The distributions can push some people into a higher tax bracket.

Retirees with traditional IRA accounts must take required minimum distributions required minimum distributions after age 72. The distributions can push some people into a higher tax bracket.

How it helps you save: People who don’t need the cash from the RMD could make a qualified charitable distribution after age 70½. QCDs allow you to roll your RMD directly over to a qualified charity (up to $108,000 in 2025) and thus reduce your taxable income

How it helps you save: How it helps you save: People who don’t need the cash from the RMD could make a qualified charitable distribution after age 70½. QCDs allow you to roll your RMD directly over to a qualified charity (up to $108,000 in 2025) and thus reduce your taxable income IRS.gov. Give more, tax-free: Eligible IRA owners can donate up to $105,000 to charity in 2024. Accessed Oct 11, 2025. .

Strategy 5: Give your retirement plan to charity

A tax-advantageous way to make donations when you die is by naming a qualified charitable organization as the beneficiary of your 401(k), IRA or other tax-deferred retirement plan. Additionally, beneficiaries of inherited IRAs must withdraw all of the money within 10 years, which reduces the tax-deferred growth potential of inherited IRAs.

A tax-advantageous way to make donations when you die is by naming a qualified charitable organization as the beneficiary of your 401(k) , IRA or other tax-deferred retirement plan. Additionally, beneficiaries of inherited IRAs must withdraw all of the money within 10 years, which reduces the tax-deferred growth potential of inherited IRAs.

How it helps you save: Naming heirs as the beneficiaries of your retirement accounts means they may have to pay income tax and potentially estate tax on withdrawals, depending upon the size of your taxable estate. Even leaving a portion of your retirement plan to charity can help secure some tax benefits for your heirs.

How it helps you save: How it helps you save: Naming heirs as the beneficiaries of your retirement accounts means they may have to pay income tax and potentially estate tax on withdrawals , depending upon the size of your taxable estate. Even leaving a portion of your retirement plan to charity can help secure some tax benefits for your heirs. ? Nerdy Tip

Estimating your income for the year and comparing it to what you think you’ll earn in other years can help you better direct your giving strategy and maximize your tax break.

Strategy 6: Charitable remainder trusts

A charitable remainder trust, or CRT, is an irrevocable trust that allows the grantor, or owner of the trust, to transform highly appreciated assets into an income stream.

A charitable remainder trust, or CRT , is an irrevocable trust that allows the grantor , or owner of the trust, to transform highly appreciated assets into an income stream.

How it helps you save: The grantor gets a tax deduction when they put the assets in the trust, avoids capital gains taxes when the asset is sold and curtails future estate taxes. Once the grantor (or the grantor’s chosen noncharity heirs) dies or the term of the income stream ends the remaining assets go to a charity the grantor has chosen.

How it helps you save: How it helps you save: The grantor gets a tax deduction when they put the assets in the trust, avoids capital gains taxes when the asset is sold and curtails future estate taxes. Once the grantor (or the grantor’s chosen noncharity heirs) dies or the term of the income stream ends the remaining assets go to a charity the grantor has chosen.

» MORE: Succession planning: How it works, steps to take

» MORE: » MORE: » MORE: Succession planning: How it works, steps to take

Strategy 7: Charitable lead trusts

A charitable lead trust is an irrevocable trust that is the opposite of a charitable remainder trust. A CLT pays an income stream out to a qualified charitable organization for a set period of time, and when that term is up, hands the remaining trust assets over to the grantor’s heirs.

How it helps you save: The grantor receives a tax deduction for the present value of the income stream donated to charity. The grantor is able to remove highly appreciated assets from their estate and transfer assets to heirs without any gift or estate tax consequences.

How it helps you save: How it helps you save: The grantor receives a tax deduction for the present value of the income stream donated to charity. The grantor is able to remove highly appreciated assets from their estate and transfer assets to heirs without any gift or estate tax consequences. ? Nerdy Tip

It can be hard to know when to employ these strategies or decide which one work best in your situation. Consider meeting with a qualified financial advisor to understand what will work best for you.

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Article sources

NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines. IRS.gov. Publication 526, Charitable Contributions. Accessed Oct 11, 2025. IRS.gov. Give more, tax-free: Eligible IRA owners can donate up to $105,000 to charity in 2024. Accessed Oct 11, 2025. About the author Tiffany Lam-Balfour Tiffany Lam-Balfour Tiffany Lam-Balfour is a former investing writer and spokesperson at NerdWallet. Previously, she was a senior financial advisor and sales manager at Merrill Lynch. Her work has been featured in MSN, MarketWatch, Entrepreneur, Nasdaq and Yahoo Finance. Tiffany earned a finance and management degree from The Wharton School of the University of Pennsylvania. See full bio.

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Strategy 1: Consolidate donations into high income years Strategy 1: Consolidate donations into high income years Strategy 2: Donate highly appreciated assets Strategy 2: Donate highly appreciated assets Strategy 3: Use a donor-advised fund Strategy 3: Use a donor-advised fund Strategy 4: Roll distributions over to charity Strategy 4: Roll distributions over to charity Strategy 5: Give your retirement plan to charity Strategy 5: Give your retirement plan to charity Strategy 6: Charitable remainder trusts Strategy 6: Charitable remainder trusts Strategy 7: Charitable lead trusts Strategy 7: Charitable lead trusts More like this Investment Basics Taxes Investing How Much Does a Financial Advisor Cost? Most financial advisors charge based on how much money they manage for you. Fees are typically 1% a year but can be lower. 2 By Andrea Coombes, Taryn Phaneuf Do You Need a Financial Advisor? 7 Ways to Tell You may need a financial advisor if you're facing big life changes, don't have financial goals, have complex compensation, high tax bills or for other reasons. Taryn Phaneuf How to Find Cheap or Free Financial Advice Quality financial advice is more accessible than ever — and much of it is free or inexpensive. Here's how to get it. Anna-Louise Jackson 3 Steps to Prepare for Your First Financial Advisor Meeting Here's what think about and bring to your first meeting with a financial advisor. June Sham

Charitable Giving and Tax Strategies to Consider

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