5 tips for giving smarter at year-end

What new tax laws mean for your 2025 giving

As the year winds down and the holidays draw near, many people reflect on what matters most: family, friends, community, and the causes close to our hearts. But if you’re considering a charitable donation this year, new tax changes from the One Big Beautiful Bill (OBBB) Act may mean that you’ll want to shift your usual giving approach. As changes go into effect this year and next, taking a fresh look at your end-of-year giving may help you reduce your taxes—and possibly increase your support for your favorite nonprofits.

1. Consider increasing your giving in 2025

If you itemize your taxes, giving in 2025 could offer better tax benefits than waiting until 2026, when new limits on the charitable tax deduction will go into effect.

Why: Beginning in 2026, itemizers can only deduct charitable gifts exceeding 0.5% of their adjusted gross income (AGI). For example, a taxpayer reporting an AGI of $200,000 could only deduct donations of more than $1,000. That taxpayer’s $8,000 donation in 2025 may be fully deductible, but for the same gift in 2026, only $7,000 would be deductible due to the $1,000 floor.

Those in the highest tax bracket of 37% will see an even greater reduction in the value of their donation. In addition to the floor, they’ll only be able to deduct up to the 35% marginal rate. If someone earns $1 million and donates $30,000, they can currently deduct the full $30,000 from their taxable income. At a 37% tax rate, that means they could save $11,100 in taxes.

But starting in 2026, the maximum deductible amount drops to $25,000. That same donor would then save only $8,750—resulting in $2,350 less in tax savings.

Actions to consider:  If you’re an itemizer, accelerating your giving to give more in this tax year may save you on taxes. You may even want to consider a bunching strategy of stacking multiple years’ worth of contributions into a single year. By using a donor-advised fund (DAF), you can make a larger charitable contribution in this tax year that is eligible for an immediate deduction and recommend grants to support nonprofits in future years. Check out this quiz to determine if a DAF is right for you.

2. Run the numbers to determine if you can itemize

If you don’t itemize your taxes, you won’t get a tax deduction for charitable giving in 2025—although this will change with a new above-the-line charitable deduction under OBBB. But some tax changes going into effect this year may mean that you can itemize, even if you haven’t in the past.

Why: Under the OBBB, the standard deduction increased, meaning that only those with adjusted gross incomes above $15,750 (single)/$31,500 (married filing jointly) can itemize and be eligible to claim a charitable deduction. But the new tax law also increased the state and local tax deduction (SALT) cap from $10,000 to $40,000. This means that some people, particularly those in higher-tax states or those paying larger mortgages, may qualify to itemize this year even if they haven’t in the recent past. For example, someone in Boston paying $25,000 in state and local taxes can now deduct the full amount from their AGI.

Note: The $40,000 SALT cap begins to phase down for those earning over $500,000.

Action to consider:  Review your total deductible expenses—including SALT, mortgage interest, and charitable contributions. If you can itemize, you’ll be able to deduct any charitable contributions this year at the current higher levels—so be sure to keep track of your donations. If you’re close to the threshold for itemizing, you may want to consider a strategy like bunching or increasing your donation this year to get you over the edge.

3. Donate stock or other non-cash assets

You generally don’t pay capital gains taxes when you donate long-term appreciated assets to charity, and you’re also eligible to claim an income tax deduction. This strategy still applies under the new tax law, and giving in 2025 could offer greater tax advantages.

Why: Given stock market increases over the past several years, many people are sitting on large gains and could benefit from turning to their portfolios for giving this year, rather than reaching for checkbooks or credit cards. Whether you itemize or not, donating long-term appreciated stocks, privately held business interests, or cryptocurrency can be a smart move. Benefits may include potentially reduce or eliminate the capital gains tax, a reset of the asset's cost basis, and a fair market value deduction on your federal income taxes, if you’re eligible.

The new tax law preserves these benefits. That said, itemizers may find it more advantageous to donate appreciated assets this year compared to future years. Beginning in 2026, any income tax deductions for non-cash donations will be reduced by the new 0.5% AGI floor, as well as the 35% marginal rate ceiling for those in the highest tax bracket.

Action to consider:  You’ll typically want to donate your most appreciated assets—you may want to review your portfolio with your financial advisor or a tax professional to identify the best assets to give. A donor-advised fund can be an easy way to make a single donation of non-cash assets and support multiple charities.

Also keep in mind:

4. Consider a donor-advised fund

With a DAF, donors can take an immediate tax deduction and then make grant recommendations in the time frame that works best for them. This makes it a particularly helpful option for those considering accelerating their giving in 2025, using a bunching strategy, or donating stock. In addition, a DAF can simplify recordkeeping and the donation process, making it a helpful tool in times of change.

5. Take action before year-end

The One Big Beautiful Bill Act introduces new complexity into charitable giving, making it more important than ever to tailor your 2025 giving strategy to your financial goals.

2025 offers a unique window to take the most of current tax laws, and you’ll need to donate by December 31. Some strategies—like bunching or donating appreciated assets—require time and planning to implement. Starting early can help you maximize your impact. Don’t wait. Act now or talk to your advisor today to make sure your giving is both meaningful and tax-savvy.

Donors concerned about the upcoming changes in tax legislation should consult their advisors or tax professionals to explore options, including accelerating charitable contributions. Fidelity Charitable’s network of Charitable Planning Specialists is available by phone to support donors and advisors who may want to revisit their giving strategies. Call us at 800-262-6039.

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The tax and estate planning information provided is general and educational in nature and should not be construed as legal or tax advice. Fidelity Charitable does not provide legal or tax advice.