You may recall that The One Big Beautiful Bill Act (OBBBA) was signed into law in July 2025. Among its many tax law changes were provisions that affect charitable giving. As a result, it is estimated that only 10% of Americans now itemize their deductions. So are there other tax-wise ways non-itemizers can give? YES!
- You can still take advantage of an above-the-line deduction up to $1000 for single filers and $2000 for joint filers. These gifts must be made in cash (including check, credit card, debit card, or electronic payment) to qualified 501(c)(3) charities. This includes local churches, but does not include donor advised funds or supporting organizations. Keep documentation for gifts over $250. If you are new to charitable giving, this is a great place to start!
- Consider using a donor advised fund (DAF) to assist with your giving. In order to take advantage of itemizing charitable contributions, many donors make a larger contribution to their fund in a given year to cover their giving for several years. They receive immediate tax benefits while making distributions as desired over time.
- Giving appreciated assets, such as securities or real estate, helps you avoid the capital gains tax, even if you don’t itemize.
- If you are over age 70 ½, consider using qualified charitable distributions from your IRA for your giving. These distributions count toward your RMD while reducing your overall taxable income.
While living with a generous heart will always be the best motivation for giving, tax benefits can be a nice bonus! Whether you itemize or not, FM Financial would love to answer your questions and come up with a giving strategy that fits your needs.
* The information contained herein is intended for informational purposes only and is not to be construed as legal, tax, accounting, insurance, or financial advice.