How Donations Can Boost Deductions on Taxable Income

Donations increase substantially in November and December, with nearly 45% of annual donations made during this time (Harness, n.d.). 

Two main reasons for this are:

1. Holidays inspire non-profits to launch donation campaigns.
2. People feel more generous during the holiday season.

Another reason people often forget about is to gain tax benefits.  Making donations can reduce your taxable income, depending on your financial situation.  If you want to boost your tax filing, learn which tax rules apply and how to use them to maximize your savings.

Itemizing Deductions

When filing your tax return, you can itemize deductions or take the standard deduction using Schedule A (Form 1040) (IRS, 2025a).  ATLAS CPAs and Advisors recommend itemizing if things like your mortgage interest, state and local taxes (SALT), medical expenses, and donations are higher than the standard deduction.

If you donate a significant amount, itemizing could save you more money.  Under the One Big Beautiful Bill Act (OBBBA) changes starting in the 2026 tax year, only donations above 0.5 percent of your adjusted gross income (AGI) will be deductible.  Any donations made under the 0.5 percent mark cannot be deducted.  Generally, cash donations are deductible up to 60 percent of AGI, and noncash donations are deductible up to 50 percent of AGI (Kraschel, 2025).  Regarding donations made in the 2025 tax year, there is no 0.5 percent AGI floor, meaning that every dollar you donate is deductible up to the current AGI-based limits.  This is a big advantage to those who donate in December, 2025, instead of January, 2026!

Make sure the organization/s you donate to qualify as a charitable organization using the IRS Tax Exempt Organization Search Tool (IRS, 2025b).  Monetary donations over $250 must be documented for tax purposes.  For noncash donations over $500, you must file Form 8283 with your tax return (IRS, 2025c).  Always notify your tax professional when you donate so they can help you complete your filing correctly.

Standard Deduction

If you take the standard deduction, you can still benefit from making donations.  The default standard deduction in 2025 is $15,750 for single filers, and $31,500 for married filing jointly (IRS, 2025d).  Beginning in the 2025 tax year, single filers can deduct $1,000, and married partners who file jointly can deduct $2,000 for cash donations to qualified organizations (Kraschel, 2025).

To Conclude

Year-end giving is a trend followed due to holiday generosity and tax benefits.  If you typically itemize or take the standard deduction, donations can reduce your taxable income and help you support causes you care about.  To make the most of these benefits, plan on donating before December 31 and record detailed documentation.  If you’re unsure about which strategy works best, consult with an ATLAS tax professional here.

 

This article includes information from these sources:

Harness. (n.d.). Year-end giving statistics. GoHarness. Retrieved [December 1, 2025], from https://www.goharness.com/blog-posts/year-end-giving-statistics 

Internal Revenue Service. (2024, December 16). Instructions for Schedule A (Form 1040), Itemized Deductions. U.S. Department of the Treasury. Retrieved [December 1, 2025], from https://www.irs.gov/pub/irs-pdf/i1040sca.pdf 

Internal Revenue Service. (2025, August 20). Tax Exempt Organization Search. U.S. Department of the Treasury. Retrieved [December 1, 2025], from https://www.irs.gov/charities-non-profits/tax-exempt-organization-search 

Internal Revenue Service. (2025, September 11). Topic No. 506: Charitable contributions. U.S. Department of the Treasury. Retrieved [December 2, 2025], from https://www.irs.gov/taxtopics/tc506 

Internal Revenue Service. (2025, October 9). IRS releases tax inflation adjustments for tax year 2026, including amendments from the One Big Beautiful Bill. U.S. Department of the Treasury. Retrieved [December 2, 2025], from https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill 

Internal Revenue Service. (2025, December 3). About Form 8283, Noncash Charitable Contributions. U.S. Department of the Treasury. Retrieved [December 3, 2025], from https://www.irs.gov/forms-pubs/about-form-8283 

Kraschel, E., & York, E. (2025, November 10). Changes to charitable giving under the One Big Beautiful Bill Act. Tax Foundation. Retrieved [December 1, 2025], from https://taxfoundation.org/blog/charitable-deduction-big-beautiful-bill/