While I could write an entire book on giving (and I might do that one day), I won’t bore you with a big block of text. I’m not sure about you, but I am exhausted from the holiday season. Below are the basics of what you need to know, no fluff. If you have any questions, feel free to send me a message, and I can take care of you.
- Qualified Charitable Distributions (QCDs): If you are 70½+, you can transfer up to $108,000 (2025 limit) directly from your IRA to charity. This satisfies your RMD without increasing your taxable income.
- Donor Advised Funds (DAFs): Think of this as a “charitable investment account.” You get an immediate tax deduction when you contribute cash or stock to the DAF now, but you can disburse the funds to specific charities over time (even years later).
- Charitable Remainder Unitrusts (CRUTs): Ideal for highly appreciated assets (like real estate or concentrated stock). You transfer the asset to the trust, receive an immediate partial tax deduction, and the trust pays you an income stream for life (minimum 5% annual payout).
- Donating Appreciated Stock: Never sell winning stock to donate cash. By transferring the shares directly to a charity (or DAF), you avoid capital gains tax and deduct the full fair market value.
- “Bunching” Strategy: With the 2025 married standard deduction at $31,500, many don’t itemize. “Bunching” involves making 2-3 years’ worth of donations in a single tax year to surge past the threshold, then taking the standard deduction in the following years.
- The “Legacy” QCD: There is a one-time opportunity to use up to $54,000 of your QCD allowance to fund a Charitable Gift Annuity (CGA) or Charitable Remainder Trust (CRT), creating lifetime income for yourself or your spouse.
- Annual Gift Tax Exclusion: For 2025, you can give $19,000 to any individual (unlimited number of recipients) tax-free. Married couples can jointly give $38,000 per recipient.
- The Medical & Tuition Exception: Payments made directly to a medical provider or educational institution do not count toward your $19,000 annual limit. (e.g., You can pay a grandchild’s $40k tuition bill tax-free, plus give them a $19k check).
- 529 Plan “Superfunding”: You can front-load five years of annual gifting into a single year for a 529 College Savings Plan. In 2025, this allows a lump sum contribution of $95,000 per beneficiary (or $190,000 per couple).
- Critical Deadlines: Dates matter. Stock transfers usually must be initiated by December 26th to settle in time; checks must be postmarked by December 31st.
Like I said, this is a bit late, but will forever be relevant. There will be new points to be added next year with Trump Accounts, among other things. Giving is a tool in your toolbox to Make Life Your Beach, and there are all sorts of technicalities that come along with it. If this is something that interests you, respond to this email or click the link below to schedule a meeting.