As the year winds down and the holiday season approaches, it’s a natural time to reflect on generosity and gratitude. For many, that means charitable giving. But the smartest givers don’t just write a check—they give strategically.

Whether you’re supporting causes close to your heart or planning a legacy of generosity, there are four tax-efficient ways to give that can make your dollars go further: cash, appreciated stock, qualified charitable distributions (QCDs), and donor-advised funds (DAFs).

Let’s break them down.

1. Cash Gifts

The simplest and most common form of giving is still one of the most effective. Writing a check or making an online donation can create an immediate impact.

If you itemize deductions, you can generally deduct up to 60% of your adjusted gross income (AGI) for gifts to public charities.

Cash giving is ideal if you want to simplify your year-end planning and make a direct, immediate difference to the organizations you support.

2. Appreciated Stock

Donating appreciated stock or other long-term investments can significantly boost your giving power.

If you’ve owned the asset for more than a year and it has grown in value, you can donate the shares directly to a qualified charity. Doing so allows you to:

• Avoid paying capital gains tax on the appreciation, and
• Deduct up to the fair market value of the gift (up to 30% of your AGI).

It’s one of the most efficient ways to give more without increasing your tax bill—especially in a strong market year.

3. Qualified Charitable Distributions (QCDs)

For those age 70½ or older, QCDs are a powerful tool.

You can give up to $100,000 per year, per person, directly from your IRA to a qualified charity. These distributions count toward your required minimum distribution (RMD) but aren’t included in your taxable income.

That makes them especially appealing for retirees who want to reduce their tax burden while making a meaningful contribution.

4. Donor-Advised Funds (DAFs)

A donor-advised fund combines flexibility with long-term impact. You can contribute cash, appreciated stock, or even non-liquid assets to the fund and take an immediate tax deduction—up to 60% of AGI for cash and 30% of AGI for appreciated assets.

From there, you can recommend grants to charities over time. DAFs also allow families to create a multi-generational giving legacy, continuing to support causes they care about well into the future.

The Bottom Line

Each of these strategies has a unique benefit, and when combined thoughtfully, they can help you maximize your impact while minimizing your tax bill.

If you’re considering charitable giving this season, the key is alignment—matching your giving strategy with your financial goals and values.

At Clarity Wealth, we help clients identify the right strategy for their situation—whether it’s simplifying giving, amplifying tax efficiency, or creating a legacy plan that endures.

If you’d like to explore the best approach for your year-end giving, reach out to us at Clarity Wealth. Let’s make your generosity go further.