Charitable giving is often included in year-end financial planning because of its
connection to tax reporting and documentation requirements. While many contributions
tend to be made in November and December, early fall provides time to plan donations,
review records, and understand how different types of gifts are treated under current
rules.

The IRS requires that most charitable contributions be completed by December 31 to be
considered for that tax year¹. Preparing ahead of that deadline gives you time to
evaluate your giving plans, confirm organization eligibility, and gather the
documentation you need for reporting.

Taking a proactive approach to year-end planning can be beneficial for all areas
of your finances. Access our year-end planning checklist to prepare yourself
before Q4 starts.

Understanding Qualified Organizations

Before making a charitable contribution, it is important to confirm that the organization is
eligible to receive tax-deductible donations. The IRS maintains guidelines for qualified
charitable organizations, which generally include nonprofit groups recognized under
section 501(c)(3) of the Internal Revenue Code².

Not all donations are deductible. Contributions made to individuals, political
organizations, or certain other entities may not qualify. Verifying an organization’s status
ahead of time helps ensure that contributions follow IRS requirements. Early fall is a
practical time to review planned recipients and confirm their eligibility.

Types of Charitable Contributions

Charitable contributions may take several forms, and each type is subject to different
rules. Cash donations are the most common, but non-cash contributions and other
methods of giving may also be considered. Cash contributions typically include
donations made by check, credit card, or electronic transfer. These donations are
straightforward to document, but they still require proper records to support any
deduction.

Non-cash contributions may include items such as clothing, household goods, or other
property. The IRS requires that donated goods be in good used condition or better, and
additional rules may apply depending on the value of the items. Determining fair market
value is part of this process, and documentation requirements increase for higher-value donations.3

Some individuals choose to donate appreciated assets, such as stocks or mutual funds.
These contributions involve additional steps, including transferring the asset to the
charitable organization and documenting its value.5 Because these transactions may
take time to process, early planning is needed.

Documentation and Recordkeeping Requirements

Proper documentation is a central part of charitable giving. The IRS requires written
records for most donations. The level of documentation depends on the amount and
type of contribution.

For cash donations, a bank record, credit card statement, or written acknowledgment
from the organization is typically required⁴. For larger contributions, a written
acknowledgment from the charity must include specific details, such as the amount of
the donation and whether any goods or services were provided in return.

Non-cash contributions require additional documentation. For example, donations
above certain thresholds may require a completed IRS form or a qualified appraisal.
Keeping accurate records at the time of the donation helps support compliance with
these requirements.

Timing Considerations for Year-End Giving

Timing plays an important role in whether a contribution is counted for a given tax year.
In most cases, donations must be completed by December 31 to be eligible for that
year’s reporting.

The method of donation may affect how timing is determined. For example, a mailed
check is generally considered complete on the date it is postmarked, while electronic
contributions are counted on the date the transaction is processed. Donations of
securities or other assets may require additional time for transfer and confirmation.

Financial institutions and charitable organizations often experience increased activity in
December, which may affect processing times. Some organizations may also establish
internal deadlines that occur before the end of the year. Planning contributions in early
fall allows time to complete these transactions without relying on final deadlines.

Qualified Charitable Distributions

Qualified charitable distributions (QCDs) are a specific type of donation available to
individuals age 70½ or older. A QCD allows funds to be transferred directly from an
individual retirement account (IRA) to a qualified charitable organization6.

These distributions may count toward required minimum distributions (RMDs) for
individuals who are subject to those rules. QCDs are subject to annual limits set by the
IRS and must be completed by December 31 to apply to that year.

Because QCDs involve coordination with a financial institution, early planning is often
helpful. Processing times and administrative requirements may vary, so initiating these
transactions well before year-end may help ensure they are completed on time.

Donor-Advised Funds

Donor-advised funds (DAFs) are another method of charitable giving. Contributions to a
DAF are generally considered complete when the funds are deposited into the account,
even if grants to specific charities are made later.7 This structure allows individuals to
separate the timing of the tax deduction from the timing of distributions to charitable
organizations. However, contributions to the DAF must still be completed by December
31 to be included in that year’s reporting.

Evaluating Giving in the Context of Tax Reporting

Charitable contributions may be deductible for taxpayers who itemize deductions. The
Tax Cuts and Jobs Act increased the standard deduction, which has affected how many
taxpayers itemize.8 As a result, not all charitable contributions lead to a tax deduction,
depending on the individual’s filing situation.

Understanding whether itemizing applies is part of evaluating charitable giving in the
context of overall tax planning. Reviewing this in early fall allows time to consider how
contributions fit within broader financial reporting.

Coordinating Charitable Giving with Other Planning Areas

Charitable giving often connects with other aspects of year-end planning. For example,
individuals taking required minimum distributions may consider how those distributions
align with charitable goals. Similarly, reviewing income and deductions as part of tax
planning may influence the timing or amount of contributions.

Coordinating these areas may provide a more complete view of year-end financial
activity. Early fall provides time to review these connections and gather any additional
information needed.

Organizing Records Before Year-End

Maintaining organized records supports both compliance and efficiency. Early fall is a
practical time to gather documentation related to charitable contributions made earlier in
the year and prepare for additional giving.

This process may include reviewing receipts, confirming acknowledgment letters, and
ensuring that all required information is available. Keeping records in one place may
support accurate reporting and avoid the need for follow-up later.

Conclusion

Charitable giving is a key part of year-end planning, with rules that depend on timing,
documentation, and the type of contribution. Now is the time to set up a meeting with a
financial professional to review your planned donations, confirm whether organizations
are eligible, and gather the records needed for reporting.

Important Disclosures:

This information is not intended to be a substitute for specific individualized tax advice.

We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1106553

Footnotes
1 Topic no. 506, Charitable contributions
https://www.irs.gov/taxtopics/tc506
2 Search for tax-exempt organizations
https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations
3 About Publication 526, Charitable Contributions
https://www.irs.gov/forms-pubs/about-publication-526
4 About Form 8283, Noncash Charitable Contributions
https://www.irs.gov/forms-pubs/about-form-8283
5 Charitable Contributions Substantiation and Disclosure Requirements
https://www.irs.gov/pub/irs-pdf/p1771.pdf
6 Qualified Charitable Distributions
https://www.irs.gov/publications/p526#en_US_2024_publink100042156
7 Donor Advised Funds
https://www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds
8 Deductions for individuals: The difference between standard and itemized deductions,
and what they mean
https://www.irs.gov/newsroom/deductions-for-individuals-the-difference-between-
standard-and-itemized-deductions-and-what-they-mean