Tax Tips for Giving Tuesday 2025 and Beyond

Richard Pon, CPA, CFP, richardponcpa.com

Giving Tuesday 2025 is December 2. With many tax law changes going into effect in 2026, here are a few tax tips to help donors make an even greater contribution on Giving Tuesday and into the new year.

Itemize Deductions Every Other Year

The 2025 standard deduction for married couples filing jointly is $31,500. For single taxpayers and married individuals filing separately, the standard deduction is $15,750.

Some taxpayers may be hard pressed to find over $31,500/$15,750 (single) of itemized deductions so they may have to bunch deductions for charitable contributions or medical expenses every 2 or 3 years.

Taxpayers may want to skip charitable deductions in 2026 and increase their 2025 charitable contributions by the amount they would have contributed in 2026 to get over the 2025 standard deduction amount.

In 2025, due to the new $40,000 limit on state and local tax deductions, it’s expected that more taxpayers will be able to claim itemized deductions. This is particularly true of single taxpayers making over $200,000 in high tax states such as California and New York who don’t own a home.

Donate in 2025 To Avoid 2026 Tax Limits on Charitable Contributions

By making more donations in 2025, individual taxpayers may avoid 2 new laws starting in 2026:

Itemized deductions for charitable contributions will have a 0.5% floor. So a taxpayer with a $100,000 AGI, the first $500 in charitable contributions will not be deductible. The new 0.5% floor applies to all donations (cash, stock, noncash). So taxpayers with lots of noncash donations may wish to donate items in 2025. So empty out your pantries, closets, garages and collectibles collection and donate to charities who can use your food pantry, used clothing and household items and toys this 2025 holiday season to avoid this limit.
For taxpayers in the highest tax bracket (the 37% tax bracket), they will have a phaseout of all itemized deductions (including charitable contributions and state taxes) equal to 2/27 of itemized deductions in the top bracket. This is roughly a maximum 5.4% reduction in itemized deductions that caps your tax savings to 35% instead of 37%.

Corporate Charitable Contributions

By making more donations in 2025, corporations can avoid a new 2026 corporate tax limit.

Starting in 2026, corporations can only deduct charitable contributions that exceed 1% of their taxable income. This means the first 1% of taxable income donated is no longer deductible for tax purposes.

2026 Charitable Contribution Deduction for Non-Itemizers

While this tip won’t have an impact for Giving Tuesday 2025, it may increase donations from donors making smaller gifts who will not get a tax deduction in 2026.

Starting in 2026, there is a charitable contribution deduction for non-itemizers. This may factor into 2025 year-end planning for some taxpayers.

The maximum deduction is $1,000 ($2,000 for joint returns). Eligible contributions must be made in cash (i.e., cash, check, credit/debit card, gift card) to a public charity other than a donor-advised fund (DAF) or supporting organization. There is no phase out for this deduction.

Tax Planning Tip:

Taxpayers who likely won’t be itemizing deductions in 2025 may get a tax benefit from delaying year-end charitable contributions until January when the new tax break takes effect. For taxpayers who file jointly, the timing shift could be worth as much as $740 (37% x $2,000).

Qualified Charitable IRA Disbursements

For those age 73 or older, required minimum distributions (RMD) from a retirement plan must be made by December 31 each year.

One strategy to avoid taxation of the RMD is to use a qualified charitable disbursement (QCD) which is known as a charitable IRA rollover.

The charitable IRA rollover is not taxable income to the donor; therefore, it is not tax deductible. Furthermore, the charitable IRA rollover gift counts toward the RMD.

This is a great option for taxpayers who do not itemize charitable deductions and/or who do not want to incur additional RMD income.

Although there is no tax deduction for a charitable IRA rollover, because it is tax-free income, it is equivalent to receiving a tax deduction on the distribution.

It also avoids the phaseout of potential deductions and credits if the distribution is included in gross income.

The QCD limit for each taxpayer over 70.5 is $108,000 in 2025 and rises to $111,000 in 2026.

Capital Gains Tax Donation

Gifts of publicly traded securities, such as stocks, bonds, or mutual funds, may provide tax savings to individuals who wish to make a charitable gift to a public charity.

By donating appreciated securities owned longer than one year and one day, donors receive the same income tax savings as a cash gift while also avoiding the capital gains tax on any appreciated value.

A donor bought ABC stock for $30 in 2020 and donates it to a public charity in 2025 when the share price is $180. The $150 appreciation is not taxed and the donor receives a $180 charitable contribution deduction.

Giving Tips:

Instead of making a gift to charity of depreciated securities that are worth less than the purchase price, sell the securities to claim a capital loss and donate the cash to charity.
Don’t wait until late December to initiate securities transactions. Brokerage firms may not be able to process the transaction by the December 31 deadline due to heavy transaction volume.

Educational and Medical Gifts

Grandparents may want to pay their grandchild’s tuition directly to a school. Although there is no income tax deduction, wealthy grandparents will avoid the gift tax which is paid by the giver. The gift tax exclusion limit per year to any single individual is $19,000 for 2025 and 2026.

However, tuition payments made directly to an accredited educational institution for educational expenses qualifies for an unlimited gift tax exclusion.

Plus, as a grandparent, such payments directly to a school are not subject to generation-skipping tax (GST). The GST tax is separate from, and in addition to, the estate tax as it is imposed by those who make gifts to younger generations.

Always consider paying tuition payments directly to the academic institution rather than giving money to family or friends to pay tuition as this avoids gift taxes.

The gift tax exclusion applies only to certain qualified transfers for tuition, but not for books, supplies, dormitory fees, board or similar expenses which do not constitute direct tuition costs.

Similarly, paying a friend or relative’s qualifying medical expenses (including insurance premiums) directly to any person (including a hospital or insurance company) who provides medical care with respect to that individual as payment for the qualifying medical expenses arising from such medical care is not a gift for gift tax purposes. These medical gifts are not deductible as a charitable contribution.