YES! Beginning in 2026, new tax law changes will affect the charitable deduction for both itemizers and non-itemizers. Non-itemizers can deduct up to $1,000 for single filers or $2,000 for married couples, while itemizers will be subject to a new floor requiring contributions to exceed 0.5% of their Adjusted Gross Income (AGI).
The best ways to donate to your church from Charles Schwab investments involve donating appreciated, long-term held securities directly to the church or through a Donor-Advised Fund (DAF) from Schwab Charitable. Donating appreciated assets avoids capital gains tax and allows for a fair market value deduction, while a DAF streamlines the process and allows you to donate without immediate decisions on which charities to support. For donors over 70½, you can also make a tax-free Qualified Charitable Distribution (QCD) from an IRA directly to your church.
- Donate Appreciated Securities Directly
- The Process: Transfer publicly traded securities (like stocks or mutual funds) you’ve owned for more than a year directly from your Charles Schwab account to your church’s brokerage account.
- Tax Benefits: You can deduct the full fair market value of the donation, and you avoid paying capital gains tax on the appreciated value.
- Considerations: Ensure your church can accept non-cash donations of this type.
- Use a Donor-Advised Fund (DAF) via Schwab Charitable
- The Process: Contribute appreciated securities or cash to your DAF, and then recommend grants from the DAF to your church.
- Tax Benefits: You receive an immediate tax deduction in the current year. This method is beneficial if your church can’t directly receive securities or if you prefer to decide on the final charity later.
- Benefits: DAFs offer low administrative fees and simplify the process of donating appreciated assets.
- Make a Qualified Charitable Distribution (QCD)
- The Process:If you are age 70½ or older, you can make a tax-free donation directly from your IRA to a qualified charity, such as your church.
- Tax Benefits:This donation can satisfy all or part of your Required Minimum Distribution (RMD) without being included in your taxable income.
- How to do it: Charles Schwab offers a special IRA checkbook for making QCDs.
Key Considerations
- Consult a Professional: Before making a significant donation, speak with a financial advisor or tax professional to ensure the strategy aligns with your overall financial plan and to understand the specific tax rules that apply to your situation.
- Check Your Church’s Policy: Confirm with your church’s administration that they are equipped to accept donations of securities or other non-cash assets.