As New Year’s Day, 2026, approaches, the IRS is presenting a range of new opportunities for taxpayers, savers, and investors. Congress has passed several provisions that take effect with the New Year. Increased deposits to Retirement Accounts, codification of today’s relatively low Tax Rates, and now increasingly flexible opportunities for charitable giving, all will positively guide generous taxpayers looking to increase savings and reduce taxes.

Throughout the year, we discuss opportunities for tax savings tied to Charitable Gifting. For decades, Americans have been able to itemize tax deductions for gifts to qualified charities. While the ability to do so has remained constant, Tax Code changes have dramatically reduced the percentage of Americans who itemize deductions on their annual Form 1040.

Perhaps the most innovative tax provision for some people is the Qualified Charitable Donation (QCD), which allows donors ages 70-1/2 and up to direct contributions from their IRA Retirement Accounts directly to the charity. This method requires only a notation on a tax form, and applies to the IRA owner’s Required Minimum Distribution (RMD) where applicable.

Beginning January 1, 2026, annual Qualified Charitable Contributions up to $1,000 per individual ($2,000 for Married Filing Jointly) may be used to reduce total income up to those limits. Essentially an “above-the-line” deduction, it allows taxpayers to choose the Standard Deduction and still receive tax benefits from their contributions. There is no age limit. This provision is similar in effect to the QCD explained above.

Charitable Gifts are deductible in the year the funds actually change hands. For many taxpayers, this means that gifts get aggregated around the Holidays. Many generous taxpayers desire a greater degree of control over the timing of gifts. One common example is found among people who give to their church and prefer to use monthly payments, rather than a year-end lump sum.

Control of gift timing can be enhanced using Donor-Advised Funds, or DAFs. Gifts applied to a DAF are permanent and deductible by the giver in the year of the donation. The donor has the right to “suggest” to the DAF preferred charities for DAF’s donations. While not mandatory, in practice, most DAFs will honor the donors’ suggestions. Perhaps the best news is that a full tax deduction is granted in the year the deposit is made, but individual gifts from the fund can be spread throughout subsequent tax years.

Innovative lawmakers are allowing taxpayers more flexibility, and hopefully increasing their propensity to make charitable contributions. Next week, we may take this flexibility to a new level, assuming the Bill gets introduced into Congress and eventually passed.