Legacy Law Blog

While the One Big Beautiful Bill Act (OBBBA), signed into law by President Trump earlier this year, will soon bring changes to charitable tax rules, there is certainty in the more favorable deduction rules now in effect in 2025.

The end of the year can be one of the most impactful times to give as many charities need extra help to finish the year in a positive financial position. So, now is a great time to think about your charitable giving, especially considering the impending changes to the tax law.

Should I accelerate my giving in 2025?

If you plan to itemize deductions in 2025, your charitable donations to qualified organizations are tax deductible, so consider including charity in your year-end planning.

If your income or deductions are likely to be lower in future years, with the increase in the standard deduction under OBBBA, making a charitable donation may allow you to exceed the standard deduction and itemize this year.

Importantly, with OBBBA’s change in the deduction rate for high income taxpayers effective in 2026, if you make charitable donations in 2025, you can benefit from the current 37% deduction rate.

How can I give to charity in 2025?

Qualified Charitable Distributions (QCDs) from IRAs will remain one of the most tax-efficient ways for you to give.

For IRA owners age 70 ½ or older, you may transfer up to $108,000 to charity tax-free this year. For those who are at least 72 years old, QCDs count toward the IRA owner's required minimum distribution for the year.

These gifts from the trustee of your IRA to your favorite charity are excluded from adjusted gross income and untouched by the charitable giving law changes going into effect in 2026.

Bunch Contributions for Tax Efficiency

If you typically spread out your charitable gifts, consider grouping several years’ worth into 2025. By “bunching” donations, you may push your total contributions above the standard deduction limit, making itemizing worthwhile and increasing your overall tax savings.

Consider a Donor Advised Fund

If you would prefer to support your favorite charities over time, a contribution to a Donor Advised Fund lets you make a large, deductible gift now while giving you the flexibility to distribute the money to charities gradually. This can be an effective way to bunch donations or lock in today’s more favorable deduction rules while still supporting causes over time.

‘Tis the Season

So, as you can see, now is a great time to make your list (check it twice) of favorite charities and give the gift of financial support to help them end the year on sound financial footing. While it will take some effort and planning, your philanthropy can make the holidays bright for everyone!