5 Tax-Smart Ways to Give Back in 2025
The end of the year is a natural time to revisit your financial goals, especially when it comes to charitable giving. The right approach can help you make a bigger impact for the causes you care about while also taking advantage of valuable tax benefits. Here are five strategies to consider as you think about your giving this year.
1. Itemize Your Deductions Start by looking at whether itemizing makes sense for you. In 2025, the standard deduction is $15,750 for individuals and $31,500 for married couples filing jointly. 1 If your eligible expenses, such as mortgage interest, property taxes, state and local taxes, and charitable gifts, exceed that amount, itemizing may lower your tax bill. For those over 65, there’s an additional deduction of up to $6,000 through 2028.
2. Try “Bunching” Your Donations If your itemized deductions come close to the standard deduction, you might benefit from “bunching” your charitable contributions. That means consolidating two years’ worth of giving into a single year so you can itemize that year, then taking the standard deduction the following year. This approach can maximize the overall tax benefit of your generosity.
3. Use Your IRA for Charitable Giving For those age 73 or older, charitable giving can also help satisfy your Required Minimum Distribution (RMD). By making a Qualified Charitable Distribution (QCD) directly from your IRA to a nonprofit, you can fulfill your RMD without the withdrawal counting as taxable income. That way, you support a cause you care about while potentially lowering your tax liability.
4. Donate Appreciated Assets Instead of donating cash, consider giving appreciated assets such as stocks or bonds. By doing so, you avoid capital gains tax and still receive a deduction for the fair market value of the asset (up to 30% of your AGI). It’s a win-win. You keep more of your tax dollars, and the charity receives the full value of your gift.
5. Set Up a Donor-Advised Fund A donor-advised fund (DAF) can offer both flexibility and efficiency in your giving. When you contribute to a DAF, you receive an immediate tax deduction, but you can decide later when and how the funds are distributed to charities. You can also contribute appreciated securities to a DAF, compounding the tax benefits.
1 Nerd Wallet, “Standard Deduction for 2024 and 2025: Amounts, When to Take,” September 8, 2025 https://www.nerdwallet.com/article/taxes/standard-deduction
Turning Generosity Into Strategy
Charitable giving isn’t just about writing a check but rather creating a strategy that aligns your generosity with your financial goals. Whether through itemizing, bunching, IRA distributions, asset donations, or a donor-advised fund, there are smart ways to give back at the end of 2025. If you’d like to explore which approach makes the most sense for your situation, we’re here to help guide you.
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Investing involves risk, including the potential loss of principal. The information provided is for general educational and informational purposes only and is not intended to serve as specific financial, investment, or tax advice. Individual circumstances vary, and you should consult with a qualified financial or tax professional before making any financial decisions.
