Jeremy Keil explains the top 3 tax efficient strategies for charitable giving in 2025.

Most people give to charity because it’s meaningful to them — not because of the tax break. And that’s the right mindset. But if you’re already giving, it makes sense to be intentional and structure that giving in a way that helps you keep more of your hard-earned money.

In this episode of Retire Today, I walk through the top three charitable giving strategies for 2025, especially in light of new tax rules taking effect in 2026 and important changes already happening this year. With only a limited window left before year-end, now is the time to understand your options.

The key is planning — not reacting in April.

Late in the year, you usually have a clear picture of your income and tax bracket. That makes it the perfect time to decide when and how to give.

With upcoming changes like:

• A new 0.5% AGI floor on charitable deductions starting in 2026
• A cap on the value of deductions for high earners
• A higher SALT deduction limit already in effect

2025 offers an opportunity to be proactive instead of passive. Depending on your income, it may make sense to pull future giving forward — or delay certain gifts until next year. But that decision should be made intentionally, not by default.

Bunching means combining multiple years of charitable giving into a single tax year to exceed the standard deduction and unlock itemized deductions.

For example, if you normally give $10,000 per year to charity but don’t itemize, you may get no tax benefit at all. But by contributing two to four years of giving in one year, you may be able to itemize and deduct the full amount.

The most effective way to do this is through a donor-advised fund (DAF).

A DAF lets you:

• Take the tax deduction now
• Give to charities later, on your preferred schedule
• Keep your giving consistent for the organizations you support

This separates the timing of your tax deduction from the timing of your charitable gifts — a powerful planning tool when income fluctuates.

One of the most tax-efficient ways to give is donating long-term appreciated investments from a taxable brokerage account.

When you sell an investment that has gone up in value, you owe capital gains tax. When you donate that same investment directly to charity (or to a donor-advised fund), you:

• Avoid paying capital gains tax
• Receive a charitable deduction for the full market value
• Remove a concentrated position from your portfolio

This strategy is especially effective after strong market years like 2023, 2024, and 2025, when many investors are sitting on significant unrealized gains.

To qualify, the investment must be held for more than one year (long-term capital gain). Many custodians automatically select the most tax-efficient shares when processing these donations, making the strategy easier to implement than most people expect.

For those age 70½ or older, Qualified Charitable Distributions are often the most powerful giving strategy available.

A QCD allows you to send money directly from your traditional IRA to a qualified charity. That money:

• Never shows up as taxable income
• Can satisfy Required Minimum Distributions (once applicable)
• Reduces future RMDs by shrinking your IRA balance

Many retirees make the mistake of taking IRA withdrawals, depositing the money into checking, and then writing checks to charity. That approach often increases taxable income, affects Social Security taxation, and can raise Medicare premiums — even if a charitable deduction is available.

QCDs avoid those issues entirely by keeping the income off your tax return in the first place.

Even if you’re not yet subject to RMDs, starting QCDs early can still make sense if part of your regular spending includes charitable giving.

These three strategies often work best in combination:

• Use donor-advised funds to bunch deductions
• Fund those DAFs with appreciated investments
• Use QCDs once you reach age 70½

But none of this should be done blindly. The right approach depends on:

• Your income this year and next
• Whether you itemize or take the standard deduction
• Your charitable goals
• Your long-term retirement and tax plan

The most important step is projecting your tax situation before the year ends and making decisions on purpose — not by default.

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About the Author:

Jeremy Keil, CFP®, CFA® is a financial advisor in Milwaukee, WI, author of the bestseller Retire Today: Create Your Retirement Master Plan in 5 Simple Steps and host of both the Retire Today Podcast and Mr. Retirement YouTube channel

Additional Links:

• Buy Jeremy’s book – Retire Today: Create Your Retirement Master Plan in 5 Simple Steps
• “Trump’s Big Beautiful Bill Could Change Retirement FOREVER!” – Mr. Retirement YouTube Channel
• “Maximize your Tax Benefits by BUNCHING Charitable Donations!” – Mr. Retirement YouTube Channel
• “How the SALT Deduction Cap Works If You Make Over $500,000 (2025 Tax Update)” – Mr. Retirement YouTube Channel
• “QCDs: The Tax-Smart Way to Give in Retirement (2025 Qualified Charitable Distributions Guide)” – Mr. Retirement YouTube Channel
• “What is the 2025 QCD Limit? (Qualified Charitable Distributions” – Mr. Retirement YouTube Channel

Connect With Jeremy Keil:

• Keil Financial Partners
• LinkedIn: Jeremy Keil
• Facebook: Jeremy Keil
• LinkedIn: Keil Financial Partners
• YouTube: Mr. Retirement
• Book an Intro Call with Jeremy’s Team

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