As the year winds down, many of us look for ways to make a positive impact and potentially benefit from tax savings. The December 31 deadline for charitable contributions is approaching, and it's crucial to act soon to ensure your donations count for the 2025 tax year.

Understanding the December 31, 2025, Deadline

To qualify for 2025 tax deductions, donations must be made by this date. Remember, checks need to be mailed, credit card donations processed, and online contributions date-stamped by December 31.

The Tax Benefits of Charitable Giving

If you itemize deductions, you can potentially deduct up to 60% of your adjusted gross income for cash donations. Donating non-cash assets, like appreciated stocks or household goods, may help avoid capital gains taxes while allowing you to claim their full value. For individuals aged 70½ or older, using Qualified Charitable Distributions (QCDs) can be an effective method to give up to $108,000 tax-free from an IRA, assisting in satisfying Required Minimum Distributions (RMDs) starting at age 73.

Steps to Maximize Your Giving Benefits

First, verify that your chosen charity is IRS-qualified by using the IRS Tax Exempt Organization Search tool. Proper documentation is crucial: obtain written acknowledgment for gifts over $250 and keep bank records or receipts for smaller contributions. Consider donating appreciated assets instead of cash for potentially larger tax breaks. Also, think about the timing—giving during a high-income year might yield better benefits. You might explore "bunching" donations into one year to exceed the standard deduction, making itemizing advantageous.

Year-end charitable giving is a valuable opportunity to contribute to causes you care about while optimizing your tax situation. The deadline is near, but there's still time to make a meaningful difference. If you're unsure about how to proceed, consult a financial professional to tailor your giving strategy to your financial situation.