Smart Charitable Giving Strategies That Also Trim Your Tax Bill

Americans give generously, and a few strategies can make that generosity go further at tax time without changing how much reaches a cause. The tactics reward a bit of planning.

Because the standard deduction is high, many donors no longer itemize and thus see no direct tax benefit from routine giving. Bunching, or concentrating several years of donations into one, can push a donor over the itemizing threshold in that year.

Giving appreciated assets

Donating appreciated stock rather than cash can be especially efficient. The donor generally avoids capital gains tax on the appreciation while deducting the full market value, a double benefit that cash gifts do not offer.

Donor-advised funds let givers make a large contribution in one year, claim the deduction then, and distribute grants to charities over time. The approach pairs naturally with bunching and with gifts of appreciated assets.

For older givers

Those of required-distribution age can direct money from a retirement account straight to charity, satisfying their distribution while keeping the amount out of taxable income. As always, the strategies work best when planned before year end, not after.