Know more, give more, stress less

For financial advisors, one of the most important conversations with generous clients is understanding the tax benefits of their donations. Clients want to give generously – but also want to understand how much is deductible for tax-smart giving.

Knowledgeable financial advisors can maximize charitable impact, tax-smart donations, and value to clients through strategic, personal, and intentional guidance.

The Basics

The foundation of advising your clients on tax, charitable donation, and deductibility strategies begins with understanding. Understanding this information helps guide clients to work more effectively with their tax advisor.

IRS Deductions for individuals: The difference between standard and itemized deductions

Non-itemizing clients (using the standard deduction)

Standard Deduction 2025 tax year:

  • Single: $15,750
  • Married Filing Jointly: $31,500
  • Head of Household: $23,625

For the 2025 tax year, non-itemizers (using the standard deduction) cannot deduct charitable donations.

Tip:Plan accordingly for non-itemizers in 2026: the OBBB has a provision that allows for charitable donation deductions –  $1,000 for single filers | $2,000 for married filing jointly.

For Clients that Itemize

Federal Tax brackets run from 10% to 37% based on a variety of factors. 

IRS Federal Income Tax Rates and Brackets for tax year 2025

2025 Charitable Donation Deductibility to Qualified Charitable Organizations

What is a Qualified Charitable Organization?

A nonprofit organization, recognized as tax-exempt by the IRS – typically a 501(c)(3), making it eligible to receive tax-deductible contributions. IRS Tax Exempt Organization Search Tool

Cash Gifts:

Deductible up to 60% of your AGI (adjusted gross income)

Non-Cash Gifts:

Deductible up to 30% of your AGI

Keep in mind:

  • Single non-cash donation of $250 or more: Written acknowledgement required
  • Total of non-cash donations over $500: IRS Form 8283 required to be filed with income tax return
  • All non-cash items valued at over $5,000: IRS requires  the donor to obtain a qualified appraisal and complete Section B of Form 8283

Note:  You may carry forward the excess donation amounts (cash and non-cash) for up to five (5) years on taxes.

OBBB Considerations

The OBBB may influence your clients’ charitable donations and deductibility – both in 2025 and 2026. Financial advisors should have a clear view of how the two years (2025 and 2026) differ.

As the financial advisor who includes philanthropic considerations in their client conversations, as well as understands the changing philanthropic and tax landscape, you position yourself as a trusted advisor.

Now is the time to consider recommending that your clients make their charitable contributions using long-term appreciated assets that offer both an income tax deduction and avoidance of capital gains tax.

Some OBBB philanthropic impact highlights:

AGI Limit for Charitable Cash Contribution Deductions Made Permanent:

The existing ability to deduct up to 60% of AGI cash contributions to 501(c)(3) charities is permanently extended – ideal for smaller cash gifts. There is no change in the 30% AGI for non-cash gifts –such as asset-based donations.

New Limits for Itemizers in the Top Marginal Tax Bracket:

Starting in 2026, the OBBBA caps benefits for itemizers at 35%, even for those in the 37% tax bracket. Clients in higher tax brackets may want to accelerate major charitable gifts into 2025 to maximize deductions before the cap begins in 2026.

New Deduction Floor Itemizers:

Starting in 2026, itemizers can only deduct charitable contributions exceeding .5% of their AGI. Clients planning major gifts may consider giving in 2025 to avoid this new limitation.

Tip:Read a full spotlight:  iGiftFund  – Will the One Big Beautiful Bill Act (OBBBA) Change the Way Your Clients Give?

From a Tax Perspective – Benefits of Donating to a donor advised fund (DAF)

  • Immediate Income Tax Deduction
  • Avoid Capital Gains Tax
  • Avoid Estate Tax
  • DAF Assets Grow Tax Free
  • May Reduce Alternative Minimum Tax (AMT)

DAFS:  Simple to implement, powerful in impact

To understand how DAFs work, explore the basics:

iGiftFund – the ideal DAF sponsor for financial advisors and donors

Tax-smart, simple, and personalized –with lower fees!

Contact iGiftFund – Our experienced professionals are here to assist and provide insights on seamlessly integrating DAFs into your practice.

About iGiftFund

iGiftFund is an IRS-recognized, independent, public charity that sponsors donor advised funds.  Its mission is to inspire donors to create, preserve and distribute their philanthropic legacy and to make a truly remarkable impact on the lives of others, including the donor.

With the hallmarks of simplicity, accessibility and low administrative fees, iGiftFund sets the standard of excellence in the industry and distinguishes itself from the large, national commercial and independent DAF sponsors. Based in Hudson, Ohio, iGiftFund works nationally with donors and with financial advisors on their familiar investment platform, in open architecture. iGiftFund’s administrative fees are the most competitive in the industry, starting at just 45 basis points on the first $500,000 tier.

This information contained in this article is intended solely for educational purposes.
The content is not intended, and shall not be construed as professional advice (or a substitution for) including but not limited to legal, financial, tax or any other professional interpretation.