Tax Benefits of Donations

By Dana Fogle, CPA, PVAS Treasurer

Donating to non-profit organizations is not only a way to support causes you’re passionate about but also an opportunity to maximize your tax deductions. When the Tax Cuts and Jobs Act increased the standard deduction in 2017, it affected many taxpayers by eliminating the direct tax deduction for their charitable giving. There are a few options available to provide a tax benefit for donors who may no longer itemize their deductions. By making strategic choices in your giving, you can minimize your tax liability while maximizing the impact of your donations.

A Qualified Charitable Distribution (QCD) from your Individual Retirement Account (IRA) is a distribution directly from your IRA to a qualified charity. QCDs are excluded from your taxable income, and can be used to satisfy all or part of your required minimum distribution. You can donate up to $108,000 annually (for 2025) from your IRA through QCDs.

Donating appreciated stock can be a great strategy to maximize your itemized charitable deductions and minimize capital gains tax. When you donate appreciated stock that you’ve held for at least one year to a qualified charity, you can deduct the full fair market value of the stock on the day of the donation. This can be significantly more advantageous than selling the stock and donating the cash, as you avoid paying capital gains tax on the increase in value of the stock.

Donor Advised Funds (DAF) are tax-exempt charitable accounts to which you can contribute funds, stocks, or other assets. You receive an immediate itemized charitable deduction for your contribution to the DAF, even if you haven’t decided which specific charities will receive the donations. You can choose when and where to distribute your charitable donations, which allows you to strategically time your deductions. The Eastern West Virginia Community Foundation can assist in setting up these funds, as can many financial institutions.

Maximizing your charitable donation tax deductions is not only beneficial for your financial well-being but also for the causes you care about. Before implementing any of these strategies, it’s essential to consult with a tax advisor or financial planner to ensure they align with your specific financial situation and goals.

Email Kristin Alexander, Executive Director at Kristin@potomacaudubon.org to plan your donation.

Updated November 5, 2025