Every December, generosity and taxes collide on the same calendar, and most people let the calendar win. The impulse to give is real and good, but it tends to arrive in a rush during the final two weeks of the year, right alongside the shopping, the travel, and the family.
A gift made in that rush still does good in the world. It just often leaves real tax value sitting on the table, value you could have redirected to the causes you love instead of to the IRS.
Think of your giving the way you think of planting a tree. Drop a seed in the ground on December 30 and something may grow, but plant it with a little forethought, in the right soil, at the right depth, and it flourishes for years.
This year that forethought matters more than usual, because the rules governing charitable giving changed significantly in 2026, and the old playbook no longer fits the new field. Let me walk you through what changed and how to give with both a generous heart and a wise strategy.
For years, the advice was simple. If you gave to charity and you itemized, you got a deduction, full stop. Beginning this year, under the law passed in 2025, several new rules reshape how that deduction works, and they cut in both directions. Some reward the everyday giver for the first time. Others quietly shrink the benefit for larger donors who give the same way they always have. Knowing which bucket you fall into is the difference between giving smart and giving by habit.
Here are the four changes that matter most this year.
The new rules reward the everyday giver and quietly trim the benefit for the habitual large donor. The strategy you used last year may not be the right one this year.
If you take one idea from this article, let it be this one, because it survived every rule change and remains one of the most efficient gifts many people never make. When you want to give, resist the reflex to write a check, and instead give shares of stock or a fund that has grown well since you bought it.
Here is why it works:
Imagine you bought $10,000 of a stock years ago and it is now worth $25,000. If you sell it, you owe capital gains tax on the $15,000 of growth before a single dollar reaches the charity.
But if you give the shares directly, you don’t pay capital gains tax on that growth, the charity receives the full $25,000, and if you itemize, you may deduct the full fair market value, subject to a limit of 30% of your AGI.⁵
It is the rare move where you and the charity can both come out ahead at once. Think of it as handing someone the whole apple instead of selling the apple, paying tax on the sale, and handing over what is left.
This is especially useful if you are holding a concentrated position that has grown too large in your portfolio, or if you have been meaning to rebalance but dreaded the tax bill. Charitable giving can become the pressure valve that lets you trim that position and do good in the same motion.
Sometimes the right year to take the deduction is not the right year to choose the charities. That is exactly what a donor-advised fund is designed for. Think of it as a charitable holding account. You contribute now, you take the deduction now, and you decide later, over months or years, which organizations actually receive the money.
Picture a hypothetical business owner who has an unusually strong income year, perhaps from selling a company or a large bonus. She contributes $100,000 to a donor-advised fund this year, takes the deduction while her income and tax rate are high, then grants out $20,000 a year to various causes over the next five years. The deduction lands when it helps most, and the giving unfolds at a thoughtful pace.
Donor-advised funds also pair well with the stock idea above, letting you move appreciated shares in all at once and dole out the generosity over time. And with the new 0.5% floor in place, concentrating several years of giving into a single year, a technique often called bunching, can help you clear that floor and preserve more of your deduction rather than losing a slice of it every year.⁶
If you are 70½ or older, there is a quietly powerful option that the 2026 changes made even better. A qualified charitable distribution lets you send money straight from your IRA to a charity, up to $111,000 per person this year,⁴ without that money ever counting as taxable income.
Why does this shine in 2026 specifically? Because a gift straight from your IRA skips the brand-new 0.5% floor and the new 35% cap altogether. While other large donors are watching the new rules nibble at their deductions, the IRA giver sails right past them. On top of that, if you are required to take a minimum distribution this year, a qualified charitable distribution can satisfy some or all of it while keeping that income off your tax return,⁴ which can also help with things like Medicare premiums that key off your income. For a retiree who gives anyway, this is often one of the most efficient ways to do it.
One note: these gifts must go directly to a qualifying charity. A qualified charitable distribution cannot be used to fund a donor-advised fund.
For those with significant assets and a desire to blend giving, income, and estate planning, two trust structures are worth knowing by name, though they call for professional guidance to set up well.
A charitable remainder trust pays you an income stream for life or for a set term, and whatever remains goes to charity afterward. It is a way to give generously while still drawing income from the gift during your lifetime. A charitable lead trust flips the order. Charity receives the income for a set period, and what remains passes to your heirs afterward, often with reduced estate tax. One feeds you first and the charity later, the other feeds the charity first and your family later.
The thread running through all of this is that smart giving connects to the rest of your financial life rather than sitting off to the side. The most effective giving coordinates with your capital gains for the year, smooths your income in a high-earning year, trims a taxable estate, and sheds the positions you no longer want rather than whatever is simply easiest to give. A gift made in isolation is a good deed. A gift made in coordination is a good deed that also strengthens your whole plan.
Timing is not a detail here, it is the whole game, because a gift that settles on January 2 does nothing for your 2026 taxes.⁵
Processing times vary, so confirm the specific deadlines with your custodian or your advisor well before the holidays rather than in the final scramble.
A generous heart deserves a wise strategy, and the two are not in tension. Before year-end, it is worth reviewing your capital gains for the year, identifying the charities that genuinely reflect your values, exploring whether a donor-advised fund or an IRA gift fits your situation, and looping in your tax and financial advisors so your giving works in concert with everything else. If a family legacy is part of your intent, bring your family into the conversation, because the lessons travel further than the dollars.
Generosity should feel aligned, not rushed. Plan it the way you plan every other meaningful part of your wealth, with intention and with time to let it take root.
A generous heart deserves a wise strategy. The two were never in tension.
At Gatewood Wealth Solutions, we help you weave charitable giving into your broader plan, so your generosity creates impact today and clarity tomorrow. Through our Firm-to-Family® approach, we can also help bring the next generation into the conversation, so your values carry forward along with your wealth. If you would like to put a thoughtful giving strategy in place before year-end, we would welcome the conversation.
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Important Disclosures:
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Gatewood Wealth Solutions and LPL Financial do not provide legal or tax advice or services.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.