5 Charitable Strategies That Cut Taxes More Than Writing a Check
Sam's List Editorial | 2026-06-23
Most generous people give the least tax-efficient way possible. They write a check.
A check is fine. It is also the version of charitable giving that leaves the most money on the table. The charitable tax strategies high income earners actually use don't change how much they give — they change what they give, when they give it, and which account it leaves from. Done right, the same gift can erase a capital gains bill, wipe out a required IRA withdrawal, or stack three years of deductions into one brutal tax year.
Here's the thing nobody tells you: starting in 2026, the One Big Beautiful Bill Act added a 0.5%-of-AGI floor on itemized charitable deductions and capped the benefit at a 35% rate for top-bracket donors (Tax Foundation analysis of OBBBA, 2025). Translation — sloppy giving costs more than it used to. Strategy matters more than it did last year, not less.
Below are five moves that beat the check. Each one is a real provision of the tax code, not a loophole.
1. The appreciated stock donation that skips the capital gains tax entirely
This is the single most under-used move in personal tax planning, and it's the easiest.
Say you bought stock for $20,000 and it's now worth $100,000. If you sell it and donate the cash, you owe capital gains tax on the $80,000 gain first — roughly $19,000 at the 23.8% federal long-term rate (20% plus the 3.8% net investment income tax). Then you donate what's left.
Donate the shares directly instead, and two things happen. You never realize the gain, so that $19,000 tax bill disappears. And under IRC §170, you deduct the full fair market value — the whole $100,000 — not your cost basis. You gave the same asset. You just kept the tax.
The catch: deductions for appreciated long-term securities are capped at 30% of your adjusted gross income (vs. 60% for cash), with a five-year carryforward for anything over the cap. So this works best in a year your income is high enough to absorb it.
2. Use a donor-advised fund to bunch several years of giving into one tax year
The standard deduction is high enough that most people who give a few thousand a year get zero tax benefit — they take the standard deduction anyway and their gifts are invisible.
A donor-advised fund (DAF) fixes that with a trick called bunching. You contribute several years' worth of giving — say five years at $20,000, so $100,000 — into the DAF in one year. You take the full deduction now, in your highest-income year, then dole the money out to charities over the following years on your own schedule. The charities don't notice a difference. Your tax return does.
The DAF donor advised fund tax math is clean: cash into a DAF deducts up to 60% of AGI, and you can fund it with appreciated stock to combine this with strategy #1. One contribution, one big deduction, gifts that keep flowing for years.
Why this matters more in 2026: with the new 0.5%-of-AGI floor on itemized charitable deductions, clearing that floor in one concentrated year — instead of barely grazing it annually — protects more of your deduction.
3. After 70.5, give straight from your IRA with a qualified charitable distribution
If you're 70½ or older, this one is close to magic.
A qualified charitable distribution (QCD) lets you send money directly from your IRA to a charity — up to $111,000 in 2026 (the limit is inflation-adjusted; it was $108,000 in 2025) under IRC §408(d)(8). The money never hits your tax return as income.
That's the whole point. A normal IRA withdrawal is taxable. Take a QCD instead and the distribution is excluded from your gross income — which can also keep you under the thresholds that trigger higher Medicare premiums and more taxation of Social Security.
Better still, a QCD counts toward your required minimum distribution. So if the IRS is forcing you to pull money out anyway, you can route it to charity and pay nothing on it — instead of taking it as income and then trying to deduct a separate gift. One note people get wrong: the QCD age is 70½, even though the RMD age is now 73. You can start QCDs before RMDs ever kick in.
4. Turn an appreciated asset into lifetime income with a charitable remainder trust
This is the play for someone sitting on a concentrated, low-basis position — a founder with a pile of company stock, or an investor with one position that's ballooned.
A charitable remainder trust (CRT) under IRC §664 is an irrevocable trust you fund with the appreciated asset. The trust — which is tax-exempt — sells the asset without triggering an immediate capital gains tax, then reinvests the full untaxed proceeds and pays you (or you and a spouse) an income stream for life or up to 20 years. Whatever remains goes to charity at the end; the IRS requires that charitable remainder to be worth at least 10% of what you put in.
You defer the gain, get an upfront partial deduction for the projected charitable remainder, and diversify out of a single risky position without taking the tax hit all at once. It's not a DIY move — it needs a trust document and an advisor — but for a $1M+ concentrated position, the deferral alone can be worth six figures.
5. Timing: the charitable tax strategies high income earners forget
Here's the pattern: most people give roughly the same amount every year, on autopilot, regardless of what their income did. That's the actual mistake.
A deduction is worth more in a year you're in a top bracket than in a year you're not. So the smartest givers time it. Sold a business this year? Exercised options? Took a big bonus? That's the year to bunch into a DAF, donate appreciated stock, or fund a CRT — concentrating deductions against the income that's taxed the hardest.
This is also where the 2026 rules bite hardest. With the 35% benefit cap on top-bracket itemized charitable deductions and the new AGI floor, unplanned giving quietly loses value. The savings don't live in how much you give. They live in the calendar.
Get a tax advisor who builds charitable tax strategies for high income years before you write the check
Every strategy above is legal, common, and routinely missed by accountants who only show up in April to file what already happened. The savings come from planning the move before the income event, not after.
That's the entire premise of CPA on Fire, a concierge tax strategy and advisory firm led by a former Big 4 CPA. They build the giving plan around your actual income year — appreciated stock, DAF bunching, QCDs, CRTs — instead of stapling a deduction onto a return that's already done.
If you're a high earner or business owner who gives, read CPA on Fire's verified reviews on Sam's List and book an intro call before your next big income year — not after. Find them on Sam's List.