By Ashley L. Madden, CFP®, CPA, CEPA®
As 2026 draws to a close, thoughtful charitable planning can help you support the causes you love while making the most of available tax benefits. Consider these three opportunities.
1. Give directly from your IRA. If you are age 70½ or older, you can make qualified charitable distributions, or QCDs, totaling up to $111,000 per person in 2026. These transfers go directly from your IRA to eligible charities, are generally excluded from taxable income, and can satisfy all or part of your required minimum distribution. QCDs do not qualify for an additional charitable deduction and cannot fund donor advised funds.
2. Be strategic about itemized deductions. Combining several years of giving into a donor advised fund can be part of an itemized deduction “bunching” strategy. This allows you to increase your deduction in years you itemize, while allowing you to recommend grants over time. Donating appreciated stock held longer than one year can also avoid capital gains tax on the appreciation and generally qualify for a fair market value deduction, subject to
applicable limits. Remember that beginning in 2026, itemizers generally can deduct charitable contributions only to the extent they exceed 0.5% of adjusted gross income.
3. Connect your charitable goals with your estate plan. Naming a local charity as beneficiary of a portion of your traditional IRA can create a meaningful legacy with a focus on your local community. Unlike individual beneficiaries, tax-exempt charities generally pay no income tax on the proceeds. Coordinate beneficiary designations with your broader estate plan.
*Tax and estate planning rules are subject to change and their application depends on individual circumstances. This information is general in nature and is not intended as tax, legal, or investment advice. Please consult your tax, legal, and financial professionals regarding your situation.