Even though the higher standard deduction limits make charitable deductions harder to find, there are still great ideas to find tax breaks within your giving efforts. Here are five tips to use charitable tax breaks.

Potential tax breaks

1. Qualified charitable distributions. If you’re age 70½ or older, you can transfer up to $111,000 (or a total of $222,000 for joint filers) directly from your IRA to a qualified charitable organization without paying any tax. Because distributions done this way are not subject to federal tax, it’s like contributing with pre-tax dollars. Plus, your contribution counts as a required minimum distribution for tax purposes.
2. Appreciated securities. Donate appreciated property (like securities) to a qualified charity, and you can deduct the current fair market value (FMV) of the property if you’ve owned it longer than a year. For example, if you acquired stock three years ago for $7,500 and it’s now worth $10,000, you can donate it and deduct the entire $10,000 FMV if you itemize your deductions. There’s no capital gains tax on the $2,500 appreciation in value ever! This is a great strategy if you are close to or over the itemized deduction threshold in a given year.
3. Bunching donations. Under current tax law, the standard deduction is more than double the historic rates, effectively lowering the number of taxpayers who will itemize their deductions. As a result, it now makes sense to “bunch” large gifts of property, like securities (see #2), in a tax year in which you expect to itemize. Conversely, if you don’t anticipate itemizing in the current tax year, you may consider postponing donations into the next year. The idea is to get the most tax deductions possible over a multiyear period.

Charitable deduction ideas

• Consider a Donor Advised Fund (DAF). This idea is to be used in conjunction with tips 2 and 3. With this idea, you create a Donor Advise Fund. You then donate appreciated assets (stocks) into the fund (tip 2). You donate enough in one year to exceed the standard deduction for that year (tip 3). You then donate your funds out of the DAF over the years. While the money is no longer yours, you still control which qualified charities receive it. Note: You cannot use a DAF to qualify for the new, non-itemized charitable giving rule outlined in tip 4.
• Leverage the new charitable deduction rule. Beginning in 2026, you can now directly deduct charitable contributions without itemizing. The amount is $1,000 ($2,000 for a married filing joint tax return).

With each of these ideas, it’s essential to follow the rules when donating. If not, your good intentions may not be deemed a qualified donation for tax purposes. Contact our RRBB advisors if you’d like to review your situation.