Smart Giving: Making the Most of Your Year-End Gifts

As we approach the end of the year, many people begin to think about how to give back to charities and even loved ones. Before you write those checks or transfer shares, it’s important to take a closer look at key financial tools that can help you give more wisely and efficiently.

Here’s what to know about Required Minimum Distributions (RMDs), Donor-Advised Funds (DAFs), and annual gift limits as you plan your year-end giving.

Give From Your IRA and Save On Taxes

Individuals 73 or older are required to take Required Minimum Distributions (RMDs) from retirement accounts each year. These distributions count as taxable income, which can bump you into a higher tax bracket if not managed properly.

One effective way to meet your RMD is through a Qualified Charitable Distribution (QCD). A QCD allows individuals 70 ½ or older to transfer up to $108,000 directly from their IRA to a qualified charity, counting toward their RMD without increasing their taxable income.

This is a simple, tax-efficient way to give back while meeting your required withdrawal amount.

Donor-Advised Fund Can Make Charitable Giving Easier

A Donor-Advised Fund (DAF) is like a charitable investment account, where you can make tax-deductible contributions now and decide later where to direct your donation.

It’s especially helpful if:

  • You want to “bunch” donations into one tax year to maximize deductions.

  • You’re facing a high-income year and want to offset your taxable income.

  • You like to plan your giving thoughtfully.

You can contribute cash, stocks, or other appreciated assets, and your funds can even grow tax-free while you decide what nonprofits you’d like to support.

Be Aware Of The Annual Gift Tax Exclusion

When giving to family and friends, the annual gift tax exclusion allows you to give up to $19,000 per person in 2025 without needing to file a gift tax return.

This means a married couple could gift $36,000 to each child or grandchild as a way to share wealth, fund education, or help with large milestones like purchasing a home or car.

You can also make direct payments for someone’s tuition or medical expenses, which don’t count toward the annual limit at all.

Please consult a qualified tax advisor for additional information and personalized guidance specific to your financial situation.

Need help managing your year-end giving?

A Daily Money Manager can help you organize your accounts, track contributions, and coordinate with your financial advisor or CPA to make every dollar of your generosity count.

Leah Nichaman