If charitable giving is part of your plan this year, there are likely ways to give in a more impactful and tax-efficient way than you would expect.

 

Strategies like donating appreciated stock, using a Donor-Advised Fund (DAF), or making Qualified Charitable Distributions (QCDs) from an IRA can help reduce taxes while supporting the causes you care about.

 

A few highlights:

• Update for 2026: Cash gifts may be deductible whether you itemize or take the standard deduction (up to certain limits).
• Donating appreciated stocks can allow you to avoid capital gains tax while still receiving a charitable deduction.
• DAFs are a great option if you have highly appreciated stocks, want an immediate deduction, tax-free growth, and the flexibility to support charities over time.
• If you’re age 70½ or older, QCDs allow you to donate directly from your IRA, potentially lowering taxable income while satisfying required distributions.

 

Tax deductible gifts to charities:

 

 

Example for itemized deductions: If your Adjusted Gross Income (AGI) is $100,000 and you give $2,000 in 2026, only the portion above $500 (0.5% of $100,000) — that is, $1,500 — will count as a tax deduction.

 

If you give $1,200 cash in 2026 and take the standard deduction, you can deduct $1,000 if single, or $1,200 if married (up to the $2,000 cap).

 

Donor Advised Funds (DAFs) – operates as a simplified version of a foundation, a charitable investment account. This is an optimal strategy for donors with highly appreciated assets.

 

• Get an immediate tax deduction when you contribute.
• Can hold onto the securities or sell them (tax free) to diversify and re-invest
• Tax-free growth
• Support multiple charities over time, simplify record-keeping (one receipt, many grants).

 

Quick example:

1. You contribute $10,000 of appreciated stock to a DAF.
2. You receive a charitable deduction (subject to rules above).
3. You avoid capital gains tax if sold.
4. You can recommend grants to other charities over the next several years.

 

Qualified Charitable Distributions (QCDs) – For Those 70½+

 

If you’re over age 70½ and have an IRA, in 2026 you can donate up to $111,000 ($222,000 for married couples) per year directly from your IRA to charity and it is not included in your taxable income. The distribution can count towards your Required Minimum Distribution (RMD).

 

Example:

 

Instead of taking a $10,000 RMD and paying income tax, you direct $10,000 straight to a 501(c)(3) charity. Your taxable income is lower, your taxes may drop, and the charity receives the full amount.

 

 

If you’d like to explore which strategy might make the most sense for you, I’m always happy to talk!

 

Best regards,

Sydney