In the hustle and bustle of the final days of the year, it is easy to overlook your final opportunities to optimize your tax and financial picture for the current year. Those who discipline themselves to make tax-wise moves are typically rewarded with improved tax outcomes. Those who don’t will have an item to add to their list of New Year’s resolutions of things to do better next year.

While provisions in the sweeping legislation passed earlier this year have introduced multiple changes that can affect your planning (see below for more), traditional approaches remain primarily intact. For instance, taxpayers who have investments that have gone down in value still have time to sell and “harvest” their losses to offset other gains or even some ordinary income. Similarly, many people can make contributions to IRAs or other qualified retirement plans.

Control: Charitable Giving’s “Superpower.” Even though the strategies above and other similar ones are valuable tools, many find their best and most flexible tax-saving opportunities lie with their charitable giving. Perhaps the most powerful aspect of charitable giving is the complete discretion you have to control three important elements of your planning:

• How much to give. This has major implications that are directly affected by the standard deduction—which is used by the majority of taxpayers. If the total of your charitable giving and your other itemized deductions adds up to more than the standard deduction, you will realize additional tax savings.
• When to give. If you have been considering a larger-than-average charitable gift, your tax savings will be larger if you make your gift in 2025 than if you postpone it until 2026. Why? If you make charitable gifts in 2026, you must reduce your total charitable deductions by 0.5% of your adjusted gross income, and you may have to use a tax bracket of 35% rather than 37% when computing tax savings. No such reduction in tax benefits applies to 2025 gifts.
• What to give. This, of course, depends on what you own, the income it generates, your assessment of its future, and its gain or loss. Cash is always welcome, but it may be better to give long-term appreciated securities because you get two tax benefits: a deduction for market value and no tax on the gain. And, if you are 70½, don’t forget transfers from your IRA.

Keeping in mind the scope of provisions under the new legislation is exceptionally broad, here are select provisions that could affect your decisions on the amount, timing, and choice of funding asset for your own gifts:

• Significant increase in the amount of certain expenses allowed as deductible this year through 2028 may mean that more taxpayers will benefit from itemizing deductions, including charitable contributions.
• Starting this year through 2028, seniors aged 65 and older can choose to itemize or use the standard deduction and still be able to use a new $6,000 “bonus” deduction.
• Starting next year non-itemizers will get a deduction up to $1,000 for singles/$2,000 for couples for cash gifts to public charities, potentially affecting timing and type of asset given.

Be sure to consult with your own financial advisors on how the entirety of the legislation affects your situation as you finalize your year-end plan. Please feel free to contact us as well if we can be helpful in any way with your charitable planning.