As 2025 comes to a close, many of us are trying to make the most of our charitable contributions. Year-end giving is a powerful way to support causes you care about, like Junior Achievement of Arizona, while also taking advantage of tax benefits. However, recent tax law changes could affect your giving strategy depending on your financial situation. Understanding these updates can help you give in a way that maximizes both your impact and your savings.
For Non-Itemizers: A New Deduction is Coming
Most taxpayers take the standard deduction, which means they don’t itemize charitable gifts. Starting in 2026, a new rule will allow non-itemizers to deduct up to $1,000 for individuals or $2,000 for couples for cash donations to qualified charities, even if you don’t itemize. This is great news for smaller donors!
Tip: For 2025, there’s no universal deduction, so your gifts won’t reduce your federal taxes unless you itemize. But giving now still helps your community and may qualify for Arizona tax credits.
For Itemizers: Know the New Limits
If you itemize deductions, you’ll see some changes in 2026:
- 5% AGI Floor: Only donations above this threshold will count.
- Cap for High Earners: If you’re in the top tax bracket, the benefit per dollar donated will be slightly reduced.
Tip: Consider “bunching” donations (giving more in 2025) to take advantage of current rules before these limits kick in.
For High Earners: Timing Matters
If you’re in a higher tax bracket, your deduction benefit will shrink slightly starting in 2026. Giving before year-end could maximize your tax savings. Large gifts, donor-advised funds, or multi-year pledges may be worth considering now.
Arizona Tax Credits: A Dollar-for-Dollar Benefit
Arizona offers some of the most generous state tax credits in the country:
- Qualifying Charitable Organization (QCO): Up to $495 (single) or $987 (married).
- Qualifying Foster Care Organization (QFCO): Up to $618 (single) or $1,234 (married).
These credits reduce your state tax bill dollar for dollar and can be claimed even if you take the standard deduction federally. Plus, gifts made through April 15th can apply to the previous tax year.
IRA Giving for Seniors
If you’re 70½ or older, you can donate directly from your IRA through a Qualified Charitable Distribution (QCD) — up to $108,000 in 2025. This can satisfy your required minimum distribution and reduce taxable income.
Make Your Gift Count
Whether you choose to give today or plan for the future, your generosity can make a lasting impact. Make a gift to Junior Achievement of Arizona to help students in your community succeed in school, work, and beyond. Every dollar makes a difference — and may save you money at tax time! Junior Achievement of Arizona’s Qualifying Charitable Organization (QCO) code is 20937.
This is not intended to be professional or legal advice. Please consult your tax professional regarding your specific tax situation.
