With major tax changes in play from the One Big Beautiful Bill Act (OBBBA), now is the time to review year-end charitable planning. Certain OBBBA provisions take effect in 2026 and could reduce the tax value of some charitable gifts so donors who want to maximize 2025 tax benefits should consider these three moves before year-end.
- Accelerate gifts into 2025 (or 2025 tax year timing)
If you expect the tax benefit of itemizing to shrink in 2026 under new rules, making charitable gifts in 2025 locks in the current rules and higher potential deduction value. This is especially worthwhile for larger gifts or when you expect your 2025 taxable income or tax rates to be higher than in later years. - Use Qualified Charitable Distributions (QCDs) from IRAs to satisfy RMDs
If you’re age-eligible, a QCD lets you direct up to the annual QCD limit directly from a traditional IRA to a qualified charity — the distribution counts toward your RMD but is excluded from taxable income (rather than taken as an itemized deduction). That can reduce adjusted gross income, help avoid bracket creep, and limit the tax hit from other phaseouts. Check current QCD annual limits and IRA eligibility rules before you send funds. - “Bunch” gifts into a donor-advised fund (DAF) or single tax year
If you normally take the standard deduction but want to capture itemized charitable benefits occasionally, bunch several years’ worth of planned giving into one year to exceed the standard deduction. A common method is to contribute a multi-year sum to a DAF by December 31: you get the immediate tax deduction in the year of the contribution, then grant to charities over subsequent years. This preserves philanthropic flexibility while maximizing near-term tax benefits. Bunching also helps the changes for the 2026 OBBBA as the reduction of charitable deduction going forward.
Here’s a quick checklist before you act:
- confirm QCD eligibility and limits with your custodian
- get written acknowledgement from charities for large gifts
- coordinate timing with your HFCO tax advisor (especially if you expect 2025 income volatility)
- consider a DAF if you want to front-load charitable deductions but control grant timing later
These steps can preserve tax value now while keeping your giving goals intact. As always, reach out to your HFCO tax professional for personalized guidance before making year-end decisions.
Sources: Journal of Accountancy, Schwab, Fidelity
