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What counts as charitable giving
Eligible charities
The IRS allows taxpayers to lower their tax bills by deducting charitable contributions from their taxable income. However, you can’t just deduct any contribution you deem to be charitable. To be eligible for a deduction, your donation must go to a qualified charity, such as a 501(c)(3) organization.
You can use the IRS tax-exempt organization search tool to find out if a charity meets government guidelines for tax-deductible donations. In general, organizations must serve a charitable, religious, scientific, literary or educational purpose or do work to prevent cruelty to children or animals. This could include certain nonprofits or religious organizations.
Eligible donations
You can make your donations in a few different forms, including:
- Cash, which includes giving physical cash, writing a check, paying with a credit card or other methods
- Property, including real estate, vehicles, clothing, food or other items
- Investments like stocks, bonds, mutual funds or cryptocurrency
How tax deductions work for charitable donations
A tax deduction lowers your tax bill by subtracting deductible expenses from your taxable income. This differs from a tax credit, which is a dollar-for-dollar reduction of your tax burden.
To deduct charitable donations on your 2025 taxes, you’ll need to itemize your deductions. If your total deductions don’t exceed the standard deduction, you shouldn’t itemize because you can get a bigger benefit from the standard deduction. In 2025, the standard deduction is:
- $15,750 for single filers and married couples filing separately
- $31,500 for married couples filing jointly
- $23,625 for heads of households
In the 2026 tax year, a provision of the One Big Beautiful Bill Act (OBBBA) will go into effect that allows non-itemizers a $1,000 deduction ($2,000 for married couples filing jointly) for cash donations.
For charitable contributions, you generally can’t deduct more than 60% of your adjusted gross income (AGI), though some types of contributions have lower limits. Cash donations are limited to 60% of your AGI, while deductions of noncash donations can’t exceed 50% of AGI. Deductions on donations of appreciated property such as stocks are further limited to 30% of AGI. If your contributions exceed the limit in a given year, you can carry them forward to use in the future for up to five years.
You’ll need to have a record of the donations you’ve made in order to deduct them. This might include a receipt, a letter of acknowledgement from the charity or a bank or credit card statement. For noncash donations of $5,000 or more, you might need an appraisal confirming the fair market value of the item.
When you donate a security such as stock, the value of your deduction is typically equal to the fair market value of the security on the date you made the donation. However, securities that you’ve held for less than a year are valued using either the amount you initially paid or the fair market value, whichever is lower.
When to make donations to maximize tax and financial benefit
You can make tax-deductible donations at any point throughout the year, but it can pay to wait until the end of the year to finalize your charitable giving strategy.
“The last bit of any given tax year is when you have the most available information to you where you can optimize your giving,” says Dan Egan, vice president of behavioral finance and investing at Betterment.
By year-end, you should have a good idea of how much you earned and what tax brackets you’ll be in when you file, Egan says. Having a clear picture of your tax situation can ensure you’re donating efficiently. You can also see how your investments have performed and whether it makes sense to donate any of those assets to avoid having to pay taxes on the capital gains later on when you sell.
Donating in 2025 vs. 2026
If you don’t itemize your deductions, you might want to consider holding off on donating until the 2026 tax year so you can benefit from the new $1,000 charitable contribution deduction for non-itemizers.
However, even if you haven’t itemized in the past, it could be worth revisiting your tax situation now to see if it makes sense to do so when you file in 2026. Ben Hake, tax director at Creative Planning, notes that with the recent changes to tax law and more homeowners paying high mortgage rates (meaning they could potentially get a larger mortgage interest deduction), more people might be able to itemize.
If you do itemize, there could be a benefit to getting your donations in before Dec. 31 rather than waiting. In the 2026 tax year, two changes will go into effect that could make charitable deductions less valuable for itemizers, particularly if you’re a high earner.
First, OBBBA implements a floor on charitable deductions. For donations made in 2026, amounts below 0.5% of your AGI aren’t deductible. This means that if your AGI is $500,000, for example, the first $2,500 of your contributions can’t be deducted.
Additionally, starting in 2026 OBBBA puts a limit on all itemized deductions for taxpayers with income in the 37% bracket. In 2026, that includes income above $640,600 for single filers and $768,700 for married couples filing jointly. For these taxpayers, the value of itemized deductions will be capped at 35 cents on the dollar for donations made in 2026 and beyond, rather than the normal 37 cents on the dollar benefit they’d get by donating this year.
Donor-advised funds
If you have a donor-advised fund, you have the flexibility to make your donations now even if you aren’t sure which charity you ultimately want to benefit from that money.
A donor-advised fund is a charitable account you open with a 501(c)(3) organization that sponsors the account and maintains control over it. From there, you decide when and how money from the account gets distributed.
When you contribute to your donor-advised fund, you receive the tax benefit of that donation in the year you made it. However, you can decide later on which charity (or charities) you want that money to go to and how much they should receive. This can be beneficial if there’s a tax benefit to donating now but you aren’t sure yet where you want that money to go or you don’t want to give your full contribution all at once.
“Bunching” strategy
“Bunching” your charitable contributions is a strategy that involves making multiple years’ worth of donations at once so you’re able to itemize your deductions and receive a larger tax benefit.
For example, if you’re a single filer who donates $10,000 a year and your total deductions don’t exceed the standard deduction, you don’t get a tax benefit from those contributions. However, if you make two years’ worth of donations in 2025 (a total of $20,000), you’ll exceed the $15,750 standard deduction. Then in 2026, you could choose whether to hold off on donating and take the standard deduction when you file your taxes or make $1,000 in cash donations and claim the non-itemized deduction enabled by the OBBBA.
How to choose a charity
To find a charity, start with the causes you care about. This will help narrow down your options. You can look for local charities that benefit your community or national nonprofits that focus on issues important to you.
To find reputable charities, you can use sites like CharityNavigator, CharityWatch or BBB Wise Giving Alliance that evaluates organizations’ finances, governance and transparency. When researching a charity, the Federal Trade Commission recommends searching the organization’s name online with words like “complaint,” “review,” “rating,” “fraud” or “scam.” This will help uncover whether the charity has a disreputable history. Additionally, if getting a tax deduction is important to you, use the IRS search tool to check whether it is a qualified organization.
If you’re looking to make a last-minute contribution before the end of the year, check with the charity you’re considering donating to and ask about its deadlines and if it has limits on the types of donations it will accept.
How to align charitable giving with your financial and personal goals
If charitable giving is important to you, making sure you’re giving in the most tax-efficient way can benefit both you and the organizations you donate to.
Types of donations
Donating cash can be more convenient, but it might be more effective to donate appreciated assets like stock.
If you have investments in a taxable brokerage account that have appreciated significantly over the years, you could incur a large capital gains tax burden when you sell those assets. However, when you donate an asset that’s increased in value, you can get a tax deduction for it instead.
“It’s an opportunity to avoid ever paying a tax on the gain, you get the deduction and the charity gets to use 100% of the funds,” Hake says.
Donation methods
If you tend to make smaller contributions or donate more sporadically, giving cash directly to your chosen charities might make the most sense for you—especially if you want to take advantage of the deduction for non-itemizers. Contributions to a donor-advised fund aren’t eligible for this deduction.
If you itemize your deductions and regularly make large donations or have appreciated assets you want to donate, you might want to consider setting up a donor-advised fund. Be aware, though, that these accounts come with specific rules and costs. Depending on the organization that sponsors your donor-advised fund, you might have to make a large initial contribution and pay an administrative fee that’s around 0.60% of your balance, though the fee might decrease as your balance goes up.
Older adults with IRAs have another option for making donations, called qualified charitable distributions (QCDs). Those who are 70 ½ or older can transfer up to $108,000 in 2025 directly to one or more eligible charities from their IRAs. These distributions are not tax deductible, but they do have a potential tax benefit: They can satisfy your required minimum distribution (RMD), which is the minimum amount you have to withdraw from your IRA each year once you reach age 73. RMDs can put you in a higher tax bracket, so donating some or all of that money can help you manage your income and keep your taxes lower.
FAQ
Can I deduct charitable donations if I take the standard deduction?
For the 2025 tax year, you can’t deduct your charitable donations if you take the standard deduction. However, starting in tax year 2026, a provision in OBBBA will allow you to deduct up to $1,000 of charitable contributions without itemizing your deductions.
What donation types qualify (cash, stock, donor-advised funds)?
Charitable donations that may be eligible for a deduction include cash, securities (such as stocks, bonds and mutual funds), and physical property (such as real estate, vehicles and household items). For donations of property, you can deduct the fair market value, which is generally the price that someone would be willing to pay for it based on all relevant information.
What happens if I donate after December 31?
The IRS’s deadline for deductible contributions is December 31, so any charitable donations you make after that date aren’t eligible to be deducted for the 2025 tax year. Keep a record of any donations you make January 1, 2026, or later so you can deduct them for the 2026 tax year.
Are there limits on how much I can deduct?
The limit on the amount of charitable contributions you can deduct ranges from 20% to 60% of your AGI. You can deduct 60% of AGI for cash contributions and 50% (minus any cash contributions) for noncash contributions. The IRS has lower limits for certain assets depending on the type of organization and the nature of the donation.
How can I verify a charity’s tax‑exempt status before donating?
You can verify a charity’s tax-exempt status using the IRS’s “Tax Exempt Organization Search” tool. It allows you to search for a charity by name, employer identification number (EIN), or location. The database specifies which organizations are eligible to receive tax-deductible charitable contributions, so you can direct your contributions accordingly.