1. Plan Charitable Giving with Next Year’s Tax Rules in Mind
Beginning in 2026, itemizers will lose an amount equal to 0.5% of their AGI from their charitable deduction.
This creates a small but meaningful “income floor” that reduces the tax benefit of giving.
Why this matters:
If generosity is part of your financial plan—or part of your ministry—2025 may be the most advantageous year to accelerate giving, including gifts you intended to make in 2026.
Many families are choosing to:
- Front-load 2026 giving by December 31, 2025
- Use donor-advised funds (DAFs) to claim the deduction now and recommend grants later
- Shift giving toward appreciated assets for maximum efficiency
Generosity is always about the heart.
But tax-efficient generosity helps you bless more people with the same dollars.
2. Give the Right Assets—Not Just the Most Convenient Ones
Writing a check is simple.
But giving appreciated assets is often far wiser.
If you donate appreciated stock or investments:
- You deduct the full fair market value, and
- You avoid paying capital gains tax
It’s one of the cleanest, highest-impact strategies for families who want to give meaningfully.
For clients age 70½ or older, Qualified Charitable Distributions (QCDs) from IRAs remain one of the most tax-efficient ways to give.
QCDs bypass taxable income entirely and can satisfy part (or all) of your Required Minimum Distribution.
3. Use a Donor-Advised Fund to Align Giving With Your Vision
A DAF allows you to separate two decisions:
- When to give for tax purposes
- Where to give for impact purposes
You can:
- Contribute now
- Receive the deduction this year
- Let the funds grow tax-free
- Recommend grants later—on your timetable
This is a powerful planning tool for families who want generosity to be an enduring part of their legacy.
4. Re-Evaluate Whether You Should Itemize or Take the Standard Deduction
The standard deduction for 2025 is:
- $31,500 for married filing jointly
- $15,750 for single filers
- $23,625 for heads of household
With the increase in the SALT deduction limit to $40,000, many households who have taken the standard deduction in recent years may find that itemizing once again makes financial sense.
If itemizing is on the table, consider “stacking” deductions by:
- Supercharging charitable gifts (especially with 2026 rules approaching)
- Prepaying property taxes
- Scheduling deductible medical procedures
- Ensuring all eligible expenses occur before December 31
Year-end planning is often about timing. If you’re going to incur an expense anyway, timing it well can produce meaningful savings.
5. Make Tax-Smart Gifts to Family Members
If gifting to children or other family members is part of your broader plan, the annual gift exclusion allows:
- $19,000 per person, or
- $38,000 per couple, per recipient
with no gift tax return required.
Even better:
Paying someone’s tuition or medical bills directly to the provider does not count toward the annual gift limit—allowing you to support family well above the exclusion without filing a gift tax return or using lifetime exemption.
This is a simple, powerful way to support the next generation wisely.
6. Max Out Tax-Advantaged Savings (for You and Your Children)
Year-end is a perfect time to confirm you’ve maximized retirement and savings opportunities that support your long-term goals.
Consider:
- Maxing out your 401(k) or confirming contributions match your plan for the year
- Funding a Roth IRA, if eligible
- Making Roth IRA contributions for your children if they have earned income
These are decisions that don’t just reduce taxes today—they build the future you want.
7. Tie Every Year-End Move Back to Your Vision
A tax strategy without a life strategy is just paperwork.
What matters most is that every move lines up with…
- The life you’re building
- The family you’re shaping
- The impact you want to make
- The kind of steward you want to be
December isn’t the time to panic.
It’s the time to be intentional.
The tax code changes. Markets fluctuate. New rules will come again.
But your vision is steady. Let’s use year-end to take steps that support not just your taxes—but your future, your values, and your calling.
If you want to walk through these ideas together, or explore which combination is best for your situation, we’re always here to help.
Kendall King, CKA, CFP, CAP
CEO
Castlepoint Wealth Advisors
