Most charitable giving happens in the last two weeks of the year, often with a credit card and a browser tab open on December 30. The generosity is real. The planning usually is not.
That gap matters more this year than it has in the past. Several federal rules around charitable deductions changed effective January 1, 2026, and California has its own rules that do not match the federal ones. Two families can give the same amount to the same organization and end up in very different places financially.
Giving well is not about chasing a deduction. It is about making sure the money you intended for a cause gets there, in the most efficient form, at a time that works for the rest of your plan. That is why we treat giving as part of comprehensive financial planning rather than a December errand. Here is what to think through before the year closes.
What Changed for Charitable Deductions in 2026
Three federal changes took effect this year under the One Big Beautiful Bill Act, and each one affects a different kind of donor.
A new deduction for people who do not itemize. Beginning with the 2026 tax year, taxpayers who take the standard deduction may deduct up to $1,000 in cash gifts, or $2,000 for married couples filing jointly. Gifts to donor-advised funds and private foundations do not qualify for this particular deduction.
A new floor for people who do itemize. Charitable deductions are now allowed only on the amount that exceeds 0.5% of your adjusted gross income. On $400,000 of AGI, the first $2,000 of giving produces no federal deduction.
A cap on deduction value for top-bracket donors. For taxpayers in the highest bracket, the benefit of itemized deductions is now limited to 35 cents per dollar rather than 37.
(Source: IRS inflation adjustments for tax year 2026, including amendments from the One Big Beautiful Bill.)
None of this changes whether giving is worthwhile. It changes the math on how and when you give. The 0.5% floor in particular rewards concentrating gifts rather than spreading small amounts across every year.
1. Donor-Advised Funds Let You Decide Now and Choose Later
A donor-advised fund, or DAF, is an account you open at a sponsoring charity. You contribute cash or assets, take the charitable deduction in the year you contribute, and then recommend grants to the organizations you choose over the following years. The balance can stay invested while it waits.
Families tend to consider a DAF in a few specific situations:
A high-income year. A business sale, a large bonus, stock vesting, or an unusually strong year can make a deduction more valuable now than later.
Bunching several years of giving into one. Because of the new 0.5% floor and the higher standard deduction, giving $30,000 in one year and nothing the next may produce a better result than $15,000 annually, while the charities you support still receive steady grants from the fund.
Giving complicated assets. Appreciated stock, and in some cases privately held business interests or real estate, may be easier to contribute to a DAF than directly to a smaller nonprofit.
Wanting time to decide. After a loss in the family or a sudden windfall, a DAF lets you commit the money now and choose recipients thoughtfully later.
There are tradeoffs worth knowing. The contribution is irrevocable, so the money cannot come back to you. Grant recommendations are advisory rather than binding, though sponsors almost always follow them. Sponsors charge administrative fees, and investment options vary. And as noted above, DAF contributions do not qualify for the new deduction available to people who take the standard deduction.
A DAF can also become a shared project for families who want to bring children or grandchildren into giving decisions, which is one reason it comes up often in estate planning conversations. If passing values along with assets is part of what you are after, our article on building your financial legacy covers that side of the picture.
2. Give Appreciated Securities Instead of Cash
If you own stock, mutual funds, or ETFs in a taxable account that have grown in value and you have held them longer than a year, giving the shares directly is often more efficient than writing a check.
When you donate appreciated shares to a qualified public charity, you generally deduct the full fair market value, and neither you nor the charity pays capital gains tax on the growth. If you sold the same shares first and donated the proceeds, the gain would be taxable to you.
A simplified example: shares you bought years ago for $10,000 are now worth $40,000. Selling creates a $30,000 long-term gain. Giving the shares directly avoids that gain, and the organization can sell them without tax.
This matters more for California residents than for most. California does not offer a preferential rate for long-term capital gains the way federal law does. Gains are taxed as ordinary income at state rates reaching 13.3% for the highest earners, so the gain you avoid is worth more here.
A few practical notes:
Shares generally need to be held more than one year to deduct full fair market value.
Deductions for appreciated property are subject to a lower AGI limit than cash gifts, with excess amounts generally carried forward up to five years.
Transfer the shares directly. Selling first and donating cash forfeits the main benefit.
Shares that have lost value are usually better sold first, so you can claim the loss, then donated as cash.
Gifts of appreciated stock also pair naturally with rebalancing. If one position has grown into an oversized share of your portfolio, directing some of it to charity can reduce that concentration while supporting a cause you care about, which we often look at alongside a broader wealth management review.
3. Qualified Charitable Distributions for IRA Owners 70½ and Older
If you are at least 70½, a qualified charitable distribution, or QCD, may be the most efficient way to give, and it is one of the first things we look at in retirement planning conversations with clients who already give.
A QCD is a direct transfer from your IRA to a qualifying public charity. The amount is excluded from your taxable income rather than claimed as a deduction, and if you are subject to required minimum distributions, a QCD can count toward satisfying your RMD for the year.
For 2026, the annual QCD limit is $111,000 per taxpayer, up from $108,000 in 2025. There is also a one-time election of up to $55,000 to fund certain split-interest vehicles such as a charitable gift annuity or charitable remainder trust. (Source: IRS inflation adjustments for tax year 2026.)
Why a QCD often beats writing a check:
It lowers your adjusted gross income instead of relying on a deduction, so it works whether or not you itemize.
Because the money never enters your income, it sidesteps the new 0.5% floor on itemized charitable deductions.
A lower AGI may help with other items tied to income, including the taxable portion of Social Security benefits and Medicare premium surcharges, which is why QCDs come up so often in retirement income planning.
The rules are strict, and small mistakes can disqualify the distribution:
You must be 70½ or older on the date the distribution is made, not simply turning 70½ that year.
The funds must go directly from the IRA custodian to the charity. A distribution paid to you first, even one you forward immediately, does not qualify.
Donor-advised funds, private foundations, and supporting organizations are not eligible recipients. You can confirm an organization's status with the IRS Tax Exempt Organization Search.
QCDs apply to IRAs. Workplace plans such as a 401(k) generally do not qualify, though a rollover may open the option.
Keep the acknowledgment letter from the charity and tell your tax preparer. A QCD is not always obvious from the Form 1099-R alone.
4. Why Most Giving Needs to Be Finished Before December 31
Charitable deductions are claimed in the year the gift is complete, and complete is defined by the transfer, not by your intent. Every December, gifts miss the deadline for ordinary logistical reasons. What completion generally looks like:
Checks are typically treated as given when mailed, so a check postmarked December 31 generally counts, but one handed over in January does not.
Credit card gifts count in the year the charge is processed, even if you pay the bill in January.
Stock transfers must leave your account and be received by the charity by December 31. Mutual fund shares and certificated shares can take considerably longer than a standard electronic transfer.
QCDs must leave the IRA by December 31, and many custodians stop accepting requests in mid-December.
A reasonable rule of thumb: start cash gifts by mid-December, and start anything involving securities or an IRA in the first half of November. Custodian cutoff dates are published each year, and they arrive earlier than most people expect.
One more timing note. If you are taking required minimum distributions and want part of that amount to go to charity, the QCD generally needs to happen before you take the rest of your RMD. Once a distribution has been paid to you, it cannot be converted into a QCD afterward.
5. Coordinate Giving With California Tax Considerations
California does not automatically adopt federal tax changes, so the state picture can look quite different from the federal one. A few points that matter for Los Angeles-area families:
California limits charitable deductions to 50% of federal AGI, compared with the 60% federal limit for cash gifts to public charities.
California has not adopted the federal changes that took effect in 2026, including the 0.5% floor for itemizers and the new deduction for people who take the standard deduction. State and federal results may differ for the same gift.
You may itemize on your California return even if you take the standard deduction federally. Because California's standard deduction is far smaller, this is common, and it means a gift can produce a state benefit even when it produces little or no federal one.
State tax rates change the capital gains conversation here. With no preferential state rate for long-term gains, giving appreciated shares rather than cash carries extra weight for California residents.
California generally follows the federal treatment of QCDs, though the state has not issued detailed guidance, which is one more reason to loop in your tax professional.
Conformity rules change, and the interaction between federal and California treatment is complicated. We coordinate with your CPA on these questions as part of tax-aware planning rather than treating state and federal decisions separately. Giving is one more piece of a plan that also includes investments, risk management, and the goals behind both.
Give on Purpose
The families who feel best about their giving are usually not the ones who gave the most. They are the ones who decided in advance how much they wanted to give, which causes mattered to them, and which assets made the most sense to use.
That clarity takes a conversation, not a deadline. If giving is part of how you want to use your money, it belongs in your financial plan alongside retirement income, taxes, and the legacy you hope to leave.
Win Wealth Solutions is an independent financial services firm based in Los Angeles, California, dedicated to helping clients build strong financial futures. Our holistic, personalized approach is about more than account balances. We help clients create customized wealth management strategies designed around their lives, goals, and long-term vision.
If you think we may be the right firm for you, contact us today. You can meet our team, call (949) 413-8387, or email Nguyen@WinWealthSolutions.com to schedule a meeting.
Frequently Asked Questions
What is a donor-advised fund and how does it work? A donor-advised fund is an account held at a sponsoring charity. You contribute cash or assets, receive the charitable deduction in the year of the contribution, and then recommend grants to the charities you choose over time while the balance stays invested. Contributions are irrevocable and cannot be returned to you, and sponsors charge administrative fees. Win Wealth Solutions helps clients evaluate whether a donor-advised fund fits their income, giving goals, and broader financial plan.
Is it better to donate stock or cash to charity? For shares held longer than one year that have grown in value, donating the shares directly often allows you to deduct the full fair market value while avoiding capital gains tax on the appreciation. Cash may make more sense for shares that have lost value, which are usually better sold first so the loss can be claimed. The right answer depends on your holdings, your tax situation, and whether the charity can accept securities. Win Wealth Solutions works with clients and their tax professionals to evaluate which assets to use for giving.
How much can I give through a QCD in 2026? For the 2026 tax year, the annual qualified charitable distribution limit is $111,000 per taxpayer, with a separate one-time election of up to $55,000 to fund certain split-interest vehicles. You must be at least 70½ at the time of the distribution, and the funds must pass directly from your IRA custodian to a qualifying public charity. Win Wealth Solutions helps IRA owners coordinate QCDs with their required minimum distributions and overall income plan.
When is the deadline for year-end charitable giving? Gifts generally must be complete by December 31 to count for that tax year. Checks are typically treated as given when mailed, credit card gifts count when the charge is processed, and transfers of securities or qualified charitable distributions must leave your account by year-end. Because custodian cutoff dates often fall in mid-December, it is wise to start gifts involving securities or an IRA several weeks earlier. Win Wealth Solutions helps clients plan giving timelines well ahead of the deadline.
About Nguyen
Nguyen Tran is founder and financial advisor at Win Wealth Solutions, an independent financial services firm based in Los Angeles, California. Dedicated to assisting clients with their greatest financial concerns, Win Wealth offers comprehensive investment management and financial strategies, coupled with unbiased advice and recommendations. As a first-generation immigrant, Nguyen thrives off hearing clients' stories, hopes, and dreams, and loves sharing his knowledge to help them find better solutions to their situations. With over 20 years of experience, he has helped clients retire, pay for their kids' college, and build lasting wealth. Nguyen studied finance and marketing and obtained a BS in Business Administration from Cal Poly Pomona, and he holds the Chartered Retirement Planning Counselor™, CRPC™ designation. He is committed to lifting his team and clients to new heights and giving back to the community through scholarships, donations, and volunteering. Raised in Modesto, Nguyen now resides in Hancock Park, Los Angeles, with his wife and three kids. Outside of work, he enjoys playing sand co-ed flag football in Huntington Beach, hiking, organizing trips, and gardening. To learn more about Nguyen, connect with him on LinkedIn.
Disclaimer: The information provided in this article is intended for general informational purposes only. It is believed to be reliable; however, Nguyen Tran and Win Wealth Solutions cannot guarantee its accuracy or completeness. It is essential to understand that laws, regulations, and circumstances may change, and the content provided in this article may not always reflect the most up-to-date information. Readers are strongly encouraged to consult with qualified professionals, including attorneys, tax and financial advisors, to ensure that any actions or decisions align with their needs, objectives, and overall financial plan.
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