Major Gifts Officer
Arkansas PBS Foundation
With the end of the calendar year quickly on its way, now is the best time to do some homework concerning your year-end and future charitable donations. We strongly encourage you to speak to your financial advisor and tax advisor for confirmation on advice for your specific investments.
If you are aged 70½ years old or older, you may be able to give a qualified charitable distribution, QCD, directly from your individual retirement account (IRA), without the dispersal being counted as taxable income. A QCD helps you fulfill your minimum required withdrawal (or more) while potentially lowering your total taxable income. The most you can withdraw from your standard IRA without counting the withdrawal as taxable income in tax year 2025 is $100,000.
Looking ahead to next year, for those households itemizing in tax year 2026, the first 0.5% of charitable giving will not be excluded from Adjusted Gross Income. For example, if you have a household income of $50,000 and you annually give $500 to charity, you will only be able to deduct $250 as a charitable contribution.
There’s another change in tax year 2026 for those in the highest tax bracket. Itemized charitable contributions will be capped at 35%, along with the first 0.5% not being excluded from Adjusted Gross Income.
If you have been considering creating a Donor-Advised Fund, you may find it more beneficial to do so before the end of tax year 2025. Donor-Advised Funds, sometimes called DAFs, are created as a holding fund for future years’ donations. When you create a DAF, all tax benefits are received in the year of creation. Some individuals find it useful to bundle several years worth of philanthropic gifts into one year of investing in their DAF, in order to maximize tax benefits in that year. Future disbursements are made to charitable organizations over the years, but there is no impact on future adjusted gross income. Once a DAF is created, no money may be returned to the creator. All money held in a DAF must be distributed to nonprofits.
We’ve highlighted a lot of tax changes for charitable giving. If you have any questions, we suggest speaking to your tax advisor and/or financial advisor.
We sincerely thank you for supporting Arkansas PBS.
If you’d like to know more about estate planning or how to make a gift from your IRA, DAF, or stock holdings, please contact Pamela Owen for Arkansas PBS’s Personal Estate Planning Guide.