Maximizing Tax Benefits Before Year-End
Key insights
- The final months of the year are your last chance to make tax-smart charitable gifts.
- Gifting appreciated securities, donor-advised funds (DAFs), and “bunching” donations are three powerful strategies.
- A conversation with your advisor and tax professional before December 31 can unlock major savings.
Why timing matters for tax-smart giving
If you’re planning to give, doing it before December 31 isn’t just a good deed it can be a smart financial move. The IRS sets strict annual deadlines and thresholds that, when used strategically, can reduce your current year’s tax liability and even create multi-year benefits.
Many of our clients don’t realize how much more powerful their giving can be when coordinated with their overall tax strategy. In a high-income year or just ahead of retirement, charitable gifting can become a flexible, efficient tool for lowering your tax bill and shaping your legacy.
3 high-impact strategies to consider now
1. Donate appreciated securities
Giving stock or other appreciated investments—rather than cash—is one of the most efficient ways to give.
Why it works:
- You avoid capital gains taxes
- You deduct the fair market value (if held for more than a year)
- The charity receives the full value
Bonus tip:
Use investments with the lowest cost basis for maximum tax efficiency. This is a great use for concentrated positions or long-held growth stocks.
2. Use a donor-advised fund (DAF)
A DAF allows you to make a large charitable contribution now, receive an immediate tax deduction, and distribute the funds to charities over time.
Why it works:
- Immediate deduction for the full donation
- Flexibility in choosing charities later
- Great tool for years with unusually high income
Example:
If you’re selling a business, getting a large bonus, or converting a retirement account, this strategy can help offset that tax impact.
3. “Bunch” your charitable contributions
If you’re close to the standard deduction threshold, “bunching” can help you itemize in some years and take the standard deduction in others.How it works:
- Instead of giving $10K each year, give $20K this year and $0 next year
- This might help you exceed the standard deduction ($29,200 for married filing jointly in 2025)
Result:
You can make the same impact while potentially saving more on taxes.
Gifting appreciated securities
Another smart way to give is by donating appreciated stocks or mutual funds directly to a qualified charity. Instead of selling the asset and paying capital gains taxes, you can transfer the investment directly and potentially deduct the full market value.
Benefits:
- Avoid capital gains tax
- Maximize the impact of your gift
- Preserve your cash on hand
This strategy works particularly well if you’ve had a strong year in the markets or are holding concentrated positions.
Create a giving calendar
Timing can help balance your giving with your cash flow. Consider spreading donations out over the year rather than giving in large lump sums. This can be as simple as:
- Setting up monthly recurring donations to causes you love
- Timing gifts around bonus or income events
- Reviewing your plan quarterly with your financial advisor
What to review before year-end
Before December 31, work with your advisor and CPA to review:
- Your capital gains and investment holdings
- Your expected income for the year
- Available deductions from previous giving
- Timing and type of charitable gifts already made
Coordinating your investment, tax, and giving strategy is key to making the most of these opportunities.
Final Thoughts
Charitable giving is a powerful way to support causes you care about but it’s also an effective tax planning tool when used wisely. By leveraging strategies like appreciated stock donations, donor-advised funds, and contribution bunching, you can multiply the impact of your generosity.
There’s still time to make 2025 a generous and tax-smart. year. If you’d like to explore which of these options fits your goals, we’d be happy to help. Let’s make your giving go further.
Investment advisory services provides by Avior Wealth Management, LLC, an SEC registered investment adviser d/b/a SC Financial Services Inc. This content is for educational purposes only and is not intended to be an investment recommendation or specific financial advice. You should consult with your financial professional to determine what best suits your investment objectives and risk tolerance.
