Charitable Deductions Tax Guide 2025
Charitable giving is a meaningful way to support causes you care about while also receiving tax benefits, like income tax deductions. Understanding how charitable deductions work can help you maximize your contributions to your favorite charities while optimizing your tax savings.
One way to simplify and enhance your charitable giving is through GoFundMe Giving Funds, donor-advised funds (DAFs) that allow you to contribute to verified charities and causes with ease while receiving a single tax receipt.
This guide will briefly explain how DAFs work and walk you through the latest Internal Revenue Service (IRS) rules, as well as strategic ways to make the most of your giving through DAFs. This content is for educational purposes only and does not constitute tax, legal, or investment advice. You should consult a qualified professional regarding your specific tax, legal, or financial situation.
What counts as a deductible contribution?
The IRS has specific guidelines on what types of charitable donations can be deducted, which qualified charitable organizations are eligible, and how to properly document your contributions. In the following sections, we’ll break down these rules so you can better assess whether your charitable giving aligns with tax regulations.
What are charitable contributions?
Charitable contributions refer to cash and non-cash assets donated to qualified nonprofit organizations that meet IRS guidelines. These contributions can include:
- Cash donations
- Securities such as stocks or bonds
- Real estate or personal property
- Contributions from retirement accounts (such as Qualified Charitable Distributions from IRAs for those over 70½)
- Cryptocurrency donations
- Donating valuable collectibles or artwork (subject to appraisal requirements)
- Business inventory or intellectual property (with specific IRS rules applying)
Recognized charitable organizations
To qualify for a tax deduction, donations must be made to IRS-recognized 501(c)(3) organizations. These are nonprofit entities recognized by the IRS as tax-exempt, because they operate for charitable purposes and not for the benefit of private interests, such as founders or shareholders. They include:
- Religious institutions
- Educational institutions
- Public charities
- Private foundations
2025 tax brackets
Federal tax brackets determine how different portions of your income are taxed, which impacts overall tax liability. Understanding these brackets can help you plan charitable contributions strategically to lower taxable income and maximize deductions. Below are the latest federal tax brackets for 2025, categorized by filing status:
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household | Married Filing Separately |
| 10% | Up to $11,925 | Up to $23,850 | Up to $17,000 | Up to $11,925 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 | $17,001 – $64,850 | $11,926 – $48,475 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 | $64,851 – $103,350 | $48,476 – $103,350 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 | $103,351 – $197,300 | $103,351 – $197,300 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 | $197,301 – $250,500 | $197,301 – $250,525 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 | $250,501 – $626,350 | $250,526 – $375,800 |
| 37% | Over $626,350 | Over $751,600 | Over $626,350 | Over $375,800 |
By understanding these tax brackets, donors can plan their charitable contributions strategically, such as timing donations in high-income years to receive the maximum tax benefit. If your taxable income places you near the threshold of a higher tax bracket, making a charitable contribution could lower your taxable income enough to keep you in a lower tax bracket, reducing your overall tax liability.
State tax implications for charitable contributions
State tax benefits for charitable contributions can vary significantly. Some states follow federal tax deduction rules, while others impose their own limits or restrictions. Key factors that influence state tax liability include:
- States with no income tax: States like Texas and Florida do not impose state income taxes, so charitable deductions primarily impact federal tax liability.
- States that follow federal deduction rules: Many states mirror federal tax laws, allowing taxpayers to claim similar charitable deductions on their state returns.
- States with lower deduction limits: Some states impose stricter caps on the amount of charitable contributions that can be deducted, limiting the benefits available at the state level.
- Non-itemized deductions: A few states allow charitable deductions even for taxpayers who take the standard deduction on their federal return.
Since state tax rules can differ widely, it’s essential to review your specific state’s tax policies or consult a tax advisor to understand how charitable giving impacts your overall tax liability.
Tax filing status and its impact on charitable deductions
Your tax filing status influences how you can claim charitable deductions:
- Single & head of household: Standard deduction thresholds impact whether itemizing is beneficial.
- Married filing jointly: Higher deduction limits can make it easier to exceed the standard deduction threshold.
- Married filing separately: Limits on deductions apply, making tax planning crucial.
Below is a table outlining the standard deduction amounts for 2025 based on different filing statuses. These figures determine whether it is more beneficial to take the standard deduction or to itemize deductions, including charitable contributions:
| Filing Status | Standard Deduction (2025) |
| Single | $15,000 |
| Married Filing Jointly | $30,000 |
| Head of Household | $22,500 |
| Married Filing Separately | $15,000 |
Itemizing vs. standard deduction
Deciding whether to take the standard deduction or itemize is an important consideration for taxpayers who want to maximize their savings. While the standard deduction provides a simple, no-hassle way to reduce taxable income, itemizing can be more beneficial if total deductions – including charitable contributions – exceed the standard deduction threshold. Below, we explore when itemizing makes sense and how strategic giving can help taxpayers optimize their deductions.
Should you itemize?
To benefit from charitable deductions, your total itemized deductions must exceed the standard deduction. For example, if you are a single filer in 2025 with a standard deduction of $14,600, you would need to have total itemized deductions – including charitable contributions, mortgage interest, and medical expenses – exceeding this amount to benefit from itemizing. If your total deductions amount to $16,000, for example, itemizing would provide a greater tax advantage than taking the standard deduction.
Simple strategies for maximizing deductions
Maximizing your charitable deductions requires careful planning, recordkeeping, and strategic giving. Whether you choose to itemize or take the standard deduction, implementing tax-savvy strategies can help ensure you get the most out of your philanthropic efforts. One practical approach is to contribute to a DAF since DAFs allow donors to claim a deduction in the year of contribution while the DAF sponsor distributes grants out to other charities over time.
Types of charitable contributions
When making charitable contributions, it’s important to understand the different types of donations and how they are treated for tax purposes. Some contributions, like cash donations, are straightforward, while others, such as donating appreciated assets, can offer additional tax benefits. Below, we break down various forms of charitable giving and their associated tax implications.
Cash vs. non-cash donations
- Cash donations: Deductible up to 60% of Adjusted Gross Income (AGI) until 01/01/2026. After 01/01/2026, deductible up to 50% of Adjusted Gross Income (AGI).
- Stocks and appreciated assets: Avoid capital gains tax while deducting the full fair market value (up to 30% of AGI).
- Real estate & personal property: Subject to IRS fair market valuation rules.
- Retirement account contributions: Those over 70½ can donate directly from IRAs without increasing taxable income.
Calculating and claiming charitable deductions
Understanding how to claim charitable deductions correctly ensures you receive the maximum tax benefits while staying compliant with IRS regulations.
IRS documentation requirements
For smaller charitable donations, documentation requirements vary based on the amount contributed. The IRS has specific rules outlining what records are necessary to substantiate deductions, ensuring compliance and proper tax reporting:
- Donations under $250: You do not need a formal receipt, but you must maintain a record such as a bank statement, credit card statement, or a written note detailing the donation amount and date.
- Donations of $250 or more: You must obtain a written acknowledgment from the charity, including the donation amount and confirmation that no goods or services were received in exchange.
- Non-cash donations over $500: You may be required to file IRS Form 8283 and provide additional details about the donation.
- Non-cash donations above $5,000: A qualified appraisal may be required to determine the fair market value of the donated asset.
Maintaining proper records ensures you can substantiate your charitable contributions if required by the IRS.
Deduction limits based on AGI
Adjusted Gross Income (AGI) is your total income minus certain adjustments, such as student loan interest, retirement contributions, and educator expenses. The IRS sets limits on how much of your AGI can be deducted for charitable contributions, depending on what is donated:
- Cash donations: Deductible up to 60% of AGI until 01/01/2026. After 01/01/2026, deductible up to 50% of Adjusted Gross Income (AGI).
- Appreciated assets (e.g. stocks): Deductible up to 30% of AGI.
- Excess deductions: If your total charitable contributions exceed these limits, the excess can be carried forward for up to five years.
Understanding these limits can help you plan your giving strategically, ensuring you maximize your deductions while staying within IRS regulations.
Tax benefits of DAFs
A donor-advised fund is a charitable giving account that allows donors to contribute assets, receive an immediate tax deduction, and advise on distributions of funds to nonprofits over time. DAFs provide flexibility and tax efficiency, making them a powerful tool for strategic philanthropy.
- Immediate tax deduction: Receive a tax deduction in the year of contribution, even if grants to charities are distributed later.
- Avoid capital gains tax: Donating appreciated assets like stocks allows you to avoid capital gains tax while deducting the full fair market value.
- Tax-free growth: Contributions to a DAF can be invested and grow tax-free, increasing your charitable impact over time.
- Bunching strategy: Make multiple years’ worth of donations in a single year to exceed the standard deduction threshold and maximize tax benefits.
How DAFs can drive tax benefits
Strategic use of DAFs can significantly enhance the practicality of giving from a tax perspective. By leveraging a DAF, donors may be able to optimize deductions, reduce taxable income, and implement a long-term giving strategy. Below are some key ways to use DAFs effectively:
- High-income years: Contribute more in years of higher income to reduce taxable earnings.
- Estate planning: Use a DAF to create a lasting charitable legacy while minimizing estate taxes.
- Flexible giving: Plan and distribute grants over time while receiving immediate tax benefits.
Give charitably through GoFundMe Giving Funds
GoFundMe Giving Funds simplify charitable giving by allowing donors to:
- Make tax-deductible contributions to verified charities and causes from a pre-established fund set aside for that purpose
- Consolidate giving with a single tax receipt
- Support communities in times of need
By leveraging tax-efficient giving strategies such as donor-advised funds, you may be able to maximize your charitable impact while optimizing tax savings. Consider setting up a GoFundMe Giving Fund account today to take control of your giving and make a lasting impact.
This content is for educational purposes only and does not constitute tax, legal, or investment advice. Any financial or tax-related calculations provided are illustrative examples only and should not be relied upon for making financial decisions.
Laws and regulations regarding donor-advised funds vary, and tax benefits depend on individual circumstances. Readers should consult with a qualified tax, legal, or financial professional for personalized guidance.