How does charitable giving play into your tax deductions? For professional advisors, how can you ensure you’re supporting your clients’ charitable giving and tax goals?
Review these must-know 2025 tax trends to discover how to make the most of the charitable giving you did and plan for the year ahead.
The tax landscape in 2025
The Tax Cuts and Jobs Act (TCJA) has been in effect since 2018. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, intended to extend the provisions of the TCJA while also adjusting federal spending.
Some of the OBBBA’s provisions address charitable giving tax strategies, but most will not take effect until 2026, including:
- New floor on itemized deductions
- New cap on the itemized deduction for the top tax bracket
- New floor and cap on charitable deduction for corporations
- Universal Charitable Deduction
- Estate tax exemption increase
These provisions may not take effect until 2026, but donors should consider making their 2025 charitable tax plan with the changes in mind.
For example, high-income donors may want to maximize their giving with major gifts in 2025 before the new cap is put in place. Or, if giving wouldn’t meet the new itemized deduction floor in 2026, donors may want to bunch their giving in 2025. And for those who haven’t historically been able to benefit from the charitable tax deduction, donors should consider how waiting to make a 2026 gift would boost their tax benefits with the Universal Charitable Deduction.
Ultimately, it’s important that you review your individual circumstances carefully, consult with a tax advisor, and review the full impact of the 2025 budget reconciliation bill on charitable giving. Click the link below to learn more.
Adjustments for inflation: 2025 tax brackets and standard deductions
Annual adjustments are made to tax brackets to account for inflation. This means that those on the edge of a tax bracket in 2024 may find themselves in a new one as they prepare their taxes for 2025.
Tax brackets for 2025
| Rate | For unmarried individuals, taxable income over | For married individuals filing joint returns, taxable income over | For heads of households, taxable income over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $11,925 | $23,850 | $17,000 |
| 22% | $48,475 | $96,950 | $64,850 |
| 24% | $103,350 | $206,700 | $103,350 |
| 32% | $197,300 | $394,600 | $197,300 |
| 35% | $250,525 | $501,050 | $250,500 |
| 37% | $626,350 | $751,600 | $626,350 |
Additionally, the standard deduction was also increased to account for inflation. Taxpayers who itemized on their 2024 taxes will want to make sure their itemized deductions continue to outweigh the standard deduction in 2025.
Standard deduction amounts
| Filing Status | 2024 standard deduction | 2025 Standard deduction |
|---|---|---|
| Single | $14,600 | $15,000 |
| Married, filing separately | $14,600 | $15,000 |
| Married, filing jointly or qualifying widow/widower | $29,200 | $30,000 |
| Head of household | $21,900 | $22,500 |
What is your maximum charitable deduction for 2025?
When itemizing deductions, how someone gave in 2025 is crucial for determining their maximum charitable deduction. In the eyes of the IRS, not all charitable donations are treated as equals. You’ll need to review what assets were donated and your adjusted gross income (AGI) to understand your maximum charitable deduction in 2025.
The maximum charitable deduction for 2025: Cash vs. non-cash assets
Most people are more familiar with cash donations. However, other assets can also be donated to charities, such as stocks or even real estate.
Using a charitable account like a Vanguard Charitable donor-advised fund allows you to donate assets to your account and then recommend grants to charities in the near and long term, meaning you don’t need to worry about liquidating the assets you donate. Contributions are immediately treated as charitable donations for the year in which they occur and can be counted toward charitable tax deductions.
No matter how generously you gave to charities in 2025, you’ll only be able to deduct up to 60% of your AGI if you gave in cash to standard public charities. For donations of appreciated assets, the maximum charitable deduction in 2025 is 30% of your AGI.
If you gave more than $500 in non-cash assets, you’ll need to complete Form 8283. If you gave in 2025 with a donor-advised fund, you’ll be able to conveniently review all your contributions from your statements. However, if you gave directly to charities, you’ll need to start organizing documentation of not only how much you gave, but with what type of assets.
For a quick way to help assess tax liability, don’t forget to use our tax calculator:
What’s my maximum charitable deduction for 2025 if I donated both cash and stocks?
The laws are black and white for cash vs. non-cash assets: maximum of 60% of AGI for cash donations, 30% for non-cash asset donations. But what if you gave both in 2025? What is the maximum then?
The answer varies from one person to another and the specifics of how you gave last year. If you gave multiple asset types to charity, ask your advisors about what maximum deduction you should expect in 2025.
What is a charitable contribution carryover?
If you gave more than the maximum deduction available to you in 2025 and you’re starting to worry as you prepare your taxes, don’t fear. A charitable contribution carryover is still an option.
A charitable contribution carryover allows you to spread your charitable contributions over several years, providing you follow certain rules. That way, you can take the charitable tax deduction beyond just the year in which you gave.
The deduction limitation on carryovers in future years is still 60% of your AGI; you can carry over excess deductions for up to five years.
Get more tax advantages with a donor-advised fund
To enjoy the most tax benefits of charitable giving, consider adding a Vanguard Charitable donor-advised fund to your plan.
With a donor-advised fund (DAF), donors can:
Reduce taxable income.
Bunch multiple years of giving into one year. This way, you can take more than the standard deduction for the year. The funds are then ready to grant charities when you choose – you don’t need to find all the charities you want to give to the same year you contribute to your account.
Reduce capital gains taxes.
When you give appreciated assets to your Vanguard Charitable DAF account rather than directly to charities, we handle the administrative task of liquidating the asset, and you can significantly minimize the capital gains taxes you might have faced.
Lower estate tax.
Give assets from your taxable estate to reduce your chance of being subject to the estate tax.
Grow charitable assets tax-free.
Once you give to your Vanguard Charitable account, charitable funds are invested, giving the potential to grow significantly more charitable dollars without incurring any additional taxes.
Access all charitable giving documentation in one convenient location.
When you do your charitable giving with a Vanguard Charitable DAF, you won’t have to scramble at the end of the year for gift receipts or lose track of giving you did earlier in the year.
*This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
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