As Thanksgiving and the holiday season approach, many individuals and families begin thinking about giving to the people and organizations that are most important to them. With year-end quickly approaching, it is also an appropriate time to consider how can fit within your overall financial and tax planning strategy.
A Donor-Advised Fund (DAF) can provide flexibility for those with charitable intentions. Contributions to a DAF may qualify for a charitable deduction in the year they are made, while grants to qualified charities can be recommended over time. This can also provide an opportunity to combine, or “bunch,” multiple years of charitable contributions into one year when itemizing deductions may be more beneficial.
For individuals age 70½ or older, a Qualified Charitable Distribution (QCD) may provide another tax-efficient way to give. A QCD allows funds to be transferred directly from an IRA to an eligible charity and is excluded from taxable income. QCDs may also satisfy all or a portion of a Required Minimum Distribution for those subject to RMDs.
Charitable deductions also changed in 2026. Individuals who take the standard deduction may deduct up to $1,000 of qualifying cash contributions, or $2,000 for married couples filing jointly. For those who itemize, the timing and amount of charitable contributions should be considered when determining the potential tax benefit of giving. [irs.gov]
Year-end is also an opportunity to consider gifts to children, grandchildren, or other family members as part of a broader estate and legacy plan. Annual gifting can allow individuals to transfer assets during their lifetime while helping family members accomplish their own financial goals. The annual gift tax exclusion is $19,000 per recipient in 2026 and increases to $20,000 in 2027.
Thoughtful gifting is not only about how much you give, but also how and when those gifts are made. With year-end approaching, taking the time to review your charitable and family gifting goals may help identify planning opportunities before December 31. If you would like help determining which gifting strategies may be appropriate for your financial situation, consider reaching out to your financial planner to review the options available to you.
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