Giving Wisely: IRS Tips to Maximize Your Charitable Impact in 2025
As 2025 draws to a close, many families are prayerfully considering their year-end gifts. The IRS has shared helpful reminders to ensure your generosity also brings the full benefit of available tax deductions. Here’s what to keep in mind as you plan your giving:
1. Give to Qualified Charities
Only donations made to IRS-recognized charitable organizations are tax-deductible. You can confirm a charity’s eligibility using the Tax Exempt Organization Search (TEOS) tool on IRS.gov. Most churches and ministries with regular worship services qualify automatically, even if they aren’t listed.
2. Itemize to Claim Deductions
If your total deductions exceed the standard deduction, you may benefit from itemizing on IRS Form 1040 Schedule A. Generally, cash gifts up to 60% of your adjusted gross income can be deducted, with the option to carry forward any excess for up to five years.
3. Keep Proof of Giving
Whether you give by cash, check, credit card, or payroll deduction, keep a bank record or a written acknowledgment from the charity. For payroll giving, your W-2 or paystub serves as documentation.
4. Donating Property or Goods
Clothing, furniture, and other household items must be in good condition to qualify. For gifts valued over $500, you may need a professional appraisal, and anything $250 or more requires a written acknowledgment from the charity. Special rules apply to vehicles—check the details at IRS.gov.
5. Understand Donor Benefits
If you receive something in return for a contribution—like a dinner, event ticket, or auction item—your deductible amount will be reduced by the fair market value of that benefit. The charity’s receipt should list this for your records.
6. IRA Charitable Giving
IRA to a qualified charity—of up to $108,000 in 2025. This gift counts toward your required minimum distribution (RMD) and is excluded from taxable income.
7. Keep Detailed Records
Documentation is key. Gifts of property worth more than $5,000 require a qualified appraisal and supporting records to substantiate your deduction.
Bottom line: Your generosity not only makes an eternal impact—it can also provide meaningful tax savings when handled wisely. As you plan your 2025 gifts, consider how thoughtful giving strategies can benefit both your family and the ministries you care about most.
This article is for informational purposes only and not intended as legal or tax advice. Please consult your financial advisor or tax professional for guidance specific to your situation.
This article is for informational purposes only and not intended as legal or tax advice. Please consult your financial advisor or tax professional for guidance specific to your situation.
Posted in Giving Opportunities
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