If you're a high net worth individual planning holiday charitable giving, you're sitting on the edge of the most significant tax law changes to philanthropic deductions in decades. The One Big Beautiful Bill Act, signed into law in July 2025, fundamentally reshapes how wealthy Americans benefit from charitable contributions—and not in your favor.
Most CPAs won't proactively tell you this, but 2025 represents your last opportunity to maximize charitable deductions under the current, more favorable rules. Starting in 2026, new restrictions will cost high earners thousands—potentially tens of thousands—in lost tax benefits.
The question isn't whether you should adjust your giving strategy. The question is how much money you're willing to leave on the table by waiting.
For decades, taxpayers in the highest marginal tax bracket received dollar-for-dollar tax savings matching their tax rate. If you paid 37% in federal income taxes, every dollar donated to qualified charities reduced your tax bill by 37 cents.
That ends in 2026.
Under the new legislation, charitable deductions for those in the top tax bracket are capped at 35%—a 5.4% reduction in the value of every dollar you give. This seemingly small change creates massive financial consequences for substantial gifts.
Real-World Impact: Consider a high net worth couple earning $2 million annually who typically donate $100,000 to charity. Under 2025 rules, this donation saves them $37,000 in federal taxes. In 2026, that same donation will save only $35,000—a $2,000 reduction in tax benefits for the exact same gift.
For families making larger philanthropic commitments, the numbers compound dramatically. A $500,000 donation saves $185,000 in 2025 versus $175,000 in 2026—a $10,000 difference in real dollars that never return to your family or your causes.
The second major change introduces a floor on charitable deductions starting in 2026. Itemizers can only claim charitable contribution deductions to the extent they exceed 0.5% of adjusted gross income.
This means wealthy donors must clear a threshold before any charitable giving becomes tax-deductible.
How The Floor Works: A couple with $1 million in AGI must donate more than $5,000 before any charitable contribution qualifies for a deduction. The first $5,000 in donations provides zero tax benefit. Only amounts exceeding that threshold reduce taxable income.
For high net worth individuals accustomed to deducting every charitable dollar, this represents a fundamental shift in tax planning. Our high net worth tax accounting services help clients navigate these complex new restrictions to preserve maximum tax efficiency.
The true impact comes from combining both restrictions. High earners face both a reduced deduction rate and a floor they must exceed before receiving any benefit.
Case Study: Miami Real Estate Investor
Consider a successful Miami real estate investor with $3 million in AGI who plans to donate $75,000 to various charities in 2026:
Same Donation in 2025:
By accelerating this gift into 2025, this investor saves an additional $6,750—money that could fund additional charitable work, investment opportunities, or family wealth building.
Most accounting firms operate reactively, preparing tax returns after the year ends rather than proactively planning before opportunities expire. This fundamental failure costs high net worth clients tens of thousands annually.
The typical CPA workflow looks like this:
This compliance-focused approach completely misses strategic opportunities like the 2025 charitable giving window. By the time your accountant files your 2026 return, the opportunity to maximize deductions under favorable 2025 rules has vanished forever.
Specialized tax reduction planning for high net worth individuals requires year-round engagement, proactive strategy sessions, and expertise in wealth preservation techniques that typical CPAs simply don't provide.
Bunching strategies involve consolidating multiple years of planned charitable contributions into a single tax year. Rather than donating $50,000 annually for three years, you contribute $150,000 in 2025 and skip 2026-2027.
Why Bunching Works in 2025:
High net worth families using bunching strategies can save $15,000-$50,000 compared to spreading identical giving across multiple years under the new restrictions.
Donor-advised funds (DAFs) represent the most powerful tool for executing bunching strategies while maintaining charitable flexibility.
Here's how it works:
Step 1: Contribute a large sum to your DAF before December 31, 2025
Step 2: Claim the full deduction on your 2025 tax return
Step 3: Distribute funds to charities over multiple years at your discretion
The critical advantage: You receive the tax deduction in the contribution year, regardless of when grants actually reach charities. This allows you to accelerate deductions into 2025 while spreading actual charitable impact across multiple years.
Strategic Application for British Expats in Miami:
For British expats managing US tax obligations, DAFs provide additional benefits beyond domestic taxpayers. Cross-border tax planning requires coordinating US charitable deductions with UK tax efficiency strategies, particularly for families maintaining residences and charitable commitments in both countries.
Our specialized cross-border tax services help expat families optimize giving strategies that work across multiple jurisdictions.
High net worth individuals frequently overlook the most tax-efficient asset to donate: appreciated securities.
When you donate stock, mutual funds, or other securities held longer than one year directly to charity, you receive two distinct tax benefits:
Benefit 1: Charitable Deduction
Deduct the full fair market value as a charitable contribution
Benefit 2: Capital Gains Avoidance
Never pay capital gains tax on the appreciation
Example: Stock Donation vs. Cash
Assume you want to donate $100,000 to charity and own stock originally purchased for $40,000:
Cash Donation:
Direct Stock Transfer:
Donating appreciated securities instead of cash saves $14,280 in this example—a 22.6% improvement in efficiency.
For high net worth individuals with substantial investment portfolios, this strategy becomes even more powerful. Our bookkeeping and financial planning services help identify optimal securities to donate based on appreciation, holding period, and overall tax impact.
High net worth individuals aged 70½ or older can make qualified charitable distributions (QCDs) directly from IRAs to charities, up to $105,000 annually in 2025.
QCDs provide unique benefits:
Important Limitation: QCDs don't qualify for the new 2026 non-itemizer deduction ($1,000/$2,000), but they bypass the AGI floor that makes traditional charitable deductions less valuable for itemizers.
For wealthy retirees with substantial IRA balances, QCDs remain one of the most tax-efficient giving strategies regardless of the 2026 changes.
High net worth individuals often accumulate appreciated real estate beyond their primary residence—investment properties, vacation homes, undeveloped land. These assets create unique charitable giving opportunities.
Benefits of Real Estate Donations:
2025 Urgency Factor: The 37% deduction rate in 2025 provides substantially more value for high-basis real estate donations. A property worth $500,000 with $100,000 in appreciation generates $185,000 in tax savings in 2025 versus $175,000 in 2026.
Additionally, real estate donations avoid the 0.5% AGI floor in 2026 for the excess value, making 2025 particularly advantageous for large property transfers.
Wealthy collectors frequently hold valuable art, wine collections, classic cars, or other appreciating collectibles. While these assets create excellent charitable opportunities, they face more restrictive deduction limits.
Collectibles Deduction Rules:
For luxury asset owners managing complex tax situations, the 2026 calculation order changes will impact collectible donations differently than cash or securities. The new rules prioritize assets with lower deduction limits first, potentially reducing overall tax benefits.
For donations to qualify for 2025 deductions, they must be completed by December 31. However, "completed" has specific definitions:
Cash and Checks:
Securities:
Real Estate and Complex Assets:
High net worth individuals planning substantial December donations should begin the process immediately. Complex transfers take weeks to complete, and any delays could push deductions into less-favorable 2026.
Many high net worth families involve children and grandchildren in philanthropy. The 2025 window creates teaching opportunities around strategic giving.
Family DAF Strategy:
This approach accomplishes multiple goals: maximizing current-year deductions, creating family engagement opportunities, and establishing long-term charitable giving structures.
The single most expensive error wealthy donors make is writing checks rather than transferring appreciated securities. For every $100,000 donated as cash rather than stock with substantial gains, donors sacrifice $10,000-$20,000 in additional tax savings.
Donors who wait until late December often discover they cannot complete sophisticated transfers in time. Securities transfers require broker coordination. Real estate donations need title companies and legal documentation.
Start planning major year-end gifts in November—or better yet, October—to ensure completion before year-end.
The IRS requires specific documentation for charitable donations:
High net worth donors making December contributions must obtain proper documentation before filing. Missing a required appraisal can disqualify the entire deduction—a catastrophic error on six-figure donations.
Charitable giving shouldn't occur in isolation. Optimal giving strategies integrate with:
This comprehensive approach requires working with specialized tax advisors who understand high net worth planning rather than generic CPAs focused only on compliance.
The combination of the 35% cap and 0.5% AGI floor makes 2026 and beyond significantly less favorable for wealthy donors. But the disadvantages extend beyond just these two changes.
Additional 2026 Considerations:
Phaseouts and Stealth Taxes: Higher AGI from reduced deductions triggers various phaseouts and limitations on other tax benefits
State Tax Impacts: Some states couple charitable deduction limits to federal rules, multiplying the impact
Estate Planning Changes: Reduced income tax benefits may shift some donors toward estate-focused charitable strategies
Nonprofit Fundraising: Charities anticipating reduced giving may become more aggressive in cultivation and solicitation
For families committed to substantial philanthropy, the strategic question isn't whether to give, but when and how to structure giving for maximum tax efficiency.
British expatriates living in Miami and throughout Florida face unique charitable giving considerations. The intersection of US and UK tax systems creates both challenges and opportunities.
Key Issues for UK Expats:
US Charitable Deductions: Only donations to US-qualified 501(c)(3) organizations qualify for US deductions
UK Gift Aid: British charities can claim Gift Aid on donations from UK taxpayers, but not on US-source giving
Double Tax Treaties: Coordination required to optimize giving across jurisdictions
Estate Planning: Cross-border estate planning may incorporate charitable trusts and foundations
For wealthy British expats maintaining substantial assets in both countries, specialized cross-border tax planning becomes essential. Generic CPAs lack expertise in international taxation nuances that can cost expat families tens of thousands annually.
The charitable giving changes in 2026 represent just one element of complex tax planning required for wealthy individuals and families. Comprehensive tax reduction strategies must integrate:
Our specialized high net worth tax services provide year-round strategic guidance that generic CPAs cannot match. We help affluent families in Miami and throughout Florida implement sophisticated tax reduction strategies that preserve wealth across generations.
Every day you delay implementing 2025 charitable giving strategies costs your family money. The December 31 deadline is absolute—once 2025 ends, the opportunity to maximize deductions at 37% without AGI floors vanishes forever.
The choice is simple:
Option 1: Take action now, accelerate charitable giving into 2025, and save thousands in taxes using proven strategies
Option 2: Wait, hope for the best, and accept reduced deductions in 2026 and beyond
For high net worth individuals serious about wealth preservation, Option 1 isn't optional—it's essential.
Don't let inadequate planning cost your family tens of thousands in unnecessary taxes. Our team specializes in helping high net worth individuals, British expats, and successful business owners implement sophisticated tax reduction strategies that typical CPAs miss.
We provide comprehensive year-end tax planning services that include:
Book your complimentary tax reduction analysis today by calling (305) 790-5604 or visiting our consultation scheduling page. We'll review your current tax situation, identify opportunities you're missing, and develop a customized strategy to maximize your 2025 charitable deductions.
The clock is ticking. December 31, 2025 represents the last opportunity to benefit from favorable charitable deduction rules that have served wealthy donors for decades. Don't let this window close without taking action.
For 2025, you must itemize deductions to claim charitable contributions. The new $1,000/$2,000 universal deduction for non-itemizers doesn't begin until 2026. High net worth individuals typically have sufficient deductions (mortgage interest, state taxes, charitable giving) to exceed the standard deduction threshold and benefit from itemizing.
Use the average of the high and low trading prices on the date of transfer. Your broker will typically provide this documentation. For mutual funds, use the net asset value (NAV) on the transfer date. Maintain records of the original purchase date and cost basis to demonstrate the asset was held for more than one year.
Charitable contribution deductions are limited to 60% of AGI for cash donations and 30% for appreciated property. Any excess can be carried forward for up to five years. However, carryforwards used in 2026 and beyond will be subject to the new AGI floor and deduction cap limitations, making them less valuable than if used in 2025.
Yes, contributions to donor-advised funds qualify for immediate charitable deductions under the same rules as direct donations. However, the new 2026 universal deduction for non-itemizers ($1,000/$2,000) specifically excludes DAF contributions. For high net worth individuals who itemize, this limitation doesn't affect the strategy.
Generally no. Donations to US charities qualify for US deductions but not UK Gift Aid. Similarly, donations to UK charities don't qualify for US deductions unless the charity has a US 501(c)(3) affiliate. Expats must strategically plan giving across jurisdictions to optimize overall tax benefits while supporting preferred causes.
For cash donations over $250, obtain written acknowledgment from the charity. For non-cash donations over $500, file Form 8283 with your tax return. For property valued over $5,000, obtain a qualified independent appraisal and detailed Form 8283. Maintain all receipts, acknowledgment letters, appraisals, and brokerage statements documenting securities transfers.
Earlier is better. Securities transfers can take 3-7 business days to complete. Real estate and complex asset transfers may require weeks. Starting contributions in early December provides buffer time for unexpected delays while ensuring completion before the December 31 deadline. Never wait until the final week unless donating by check or credit card.
Qualified charitable distributions (QCDs) bypass adjusted gross income entirely and don't qualify as itemized deductions, so the 0.5% AGI floor doesn't apply. However, QCDs also don't qualify for the new 2026 universal charitable deduction. For individuals 70½+, QCDs remain highly tax-efficient regardless of the 2026 changes, particularly for those with substantial IRA balances and RMD obligations.
Yes, cryptocurrency held for more than one year can be donated similarly to appreciated securities. You receive a deduction for the fair market value and avoid capital gains tax on the appreciation. However, cryptocurrency donations require careful documentation, including establishing value on the donation date and ensuring the charity can accept digital assets. Given cryptocurrency's volatility, consider making these donations earlier in December to allow processing time.
This is the perfect scenario for a donor-advised fund. You can contribute a large amount before December 31, 2025, receive the full deduction on your 2025 tax return, and then take time to research and select recipient charities over the following months or years. The DAF allows you to separate the timing of your tax deduction from your grant decisions, providing flexibility while preserving tax benefits.