Last-Minute Opportunities for Tax-Advantageous Giving
The following information is for educational purposes and does not constitute tax advice. Please consult with your accountant or tax professional.
As 2025 comes to a close and the events of the past year sink in, it’s clear that continuing the fight for LGBTQ+ justice and equality is more important than ever. For all of us making year-end charitable gifts, it’s important to know about existing opportunities—as well as upcoming changes—within our tax laws that could maximize those donations.
Qualified Charitable Distribution Opportunities for Seniors
If you are 70½ or older, you can give up to $108,000 this year from your IRA directly to a qualified charity without having to pay income tax on the distribution. Known as a Qualified Charitable Distributions (or QCDs), these distributions count towards your annual required minimum distribution (RMD) if you are age 73 or older. The amount is not counted towards your gross income, which can reduce your risk of landing in a higher tax bracket, and you are not required to itemize deductions on your tax return in order to take advantage of it.
Although Donor Advised Funds (DAFs) are not currently eligible recipients of QCDs, Horizons has several other types of funds that are eligible to receive such distributions, such as our general (unrestricted) fund, funds allocated to specific initiatives, and scholarship funds.
Frontloading 2025 Donations
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, has the potential to dramatically impact charitable giving by imposing a number of rules that affect both individual and corporate donations.
While a few of these are positive, such as making the 60% AGI limit for cash contributions to public charities permanent and adding a small above-the-line charitable deduction for non-itemizers, the remainder will undoubtedly have a chilling effect on charitable giving. For individuals, several new restrictions are particularly noteworthy when it comes to charitable giving.
Starting in 2026, itemized charitable deductions will be capped at 35%. For individuals in the highest tax bracket (currently 37%), this means that the value of their deductions for charitable gifts will be lower under the new rules. A new floor is also being imposed that prohibits itemizers from claiming deductions, unless their charitable contributions exceed .5% of their adjusted gross income.
Fortunately, these provisions do not go into effect until January 1, 2026. This means that individuals in the highest tax bracket who plan to make substantial charitable gifts should consider whether it makes sense to make some or all of these donations before year-end. Please speak with your tax professional for additional details on how to maximize your tax savings. If you don’t have a tax professional, you can search Horizons’ professional advisors directory here.
No matter the size of our gifts though, all of us should be armed with information when making donations. Please share this article with your friends and family, and encourage them to make year-end gifts, too.
For more information or questions about giving to Horizons Foundation, contact us at [email protected].
