Keep More of Your Money: How to Maximize Your Tax Savings with Year End Giving Based on the New Tax Law

Many people make year-end donations to their favorite charities before December 31. But with recent tax changes, you might want to rethink your giving strategy for 2025.

This year, the new law could mean that some taxpayers benefit from giving more in 2025 than they originally planned, while others might be better off waiting until January to make their donations.

These changes come from the One Big Beautiful Bill Act, signed into law by President Donald Trump on July 4, which has added new complexities to charitable giving.

For Those Who Don’t Itemize

If you don’t itemize your deductions (90% of Americans don’t itemize) it would be best to delay your 2025 giving until January of 2026.  The new tax law allows for a $1,000 tax deduction starting in 2026 for taxpayers who don’t itemize.  It rises to $2,000 for married couples.  In essence, here’s what that means.  If you’re in the 22% tax bracket, a $1,000 gift to charity in early 2026 will net you $220 in tax savings.  Double that if you’re married and give $2,000 ($440 in savings).  The gift must be in cash (checks or credit card gifts are fine, but donations of bitcoin or personal property won’t count).

For Those Who Do Itemize

For taxpayers who typically itemize deductions on their 2025 federal tax return, sticking with the December 31 deadline could still make sense. However, it’s important to understand the new rules coming into effect for 2026 returns. Starting in 2026, only charitable contributions exceeding 0.5% of your adjusted gross income will be deductible for those who itemize.  For example, if your AGI is $200,000, the first $1,000 of charitable donations won’t count toward your deduction. Only contributions above that amount are deductible. As a result, it may be advantageous to adjust your giving strategy, front-loading contributions into 2025 to avoid the new floor and other limitations that take effect in 2026.