Dear Team 88.3 Member,
As we approach the end of the year, we would like to ensure that you are aware of some upcoming changes in the law that may impact the tax benefits of charitable giving.
Starting in 2026, the “One Big Beautiful Bill Act” (OBBBA) will introduce new limits on charitable deductions:
- If you itemize deductions, you will only be able to deduct charitable donations that exceed 0.5% of your adjusted gross income.
- High-income earners will face a 35% cap on the tax benefit of itemized deductions, which could reduce the tax benefit of giving.
Given these changes, it may be advisable to accelerate charitable contributions into 2025 to maximize the benefits of current tax rules. We recommend discussing this with your personal tax advisor to determine the best course of action for your specific situation.
Additionally, we wanted to remind you of some tax-advantaged opportunities for charitable giving that are available in addition to regular monetary contributions. Utilizing appropriate tax-advantaged giving methods can represent wise stewardship for donors in certain situations.
Gifts of appreciated assets
Giving certain types of noncash items that have appreciated in value can offer significant tax advantages. When you give appreciated assets such as real estate, publicly traded stock, or virtual currency that you have held for more than one year, you typically qualify for a deduction based on the full fair market value of the asset given, without having to pay income tax on the appreciation of the asset. This avenue of giving is especially beneficial because Z Ministries, Inc, as a tax-exempt organization, can sell these gifted assets without paying tax on the gain. The combination of you, the donor, being able to deduct the full fair market value of the asset donated, together with the exclusion from tax on the gain, results in both a maximum tax deduction for you and maximum funds available to Z Ministries, Inc. for general use purposes.
Qualified charitable IRA distributions
If you are age 70½ or older, you may have a tax-advantaged opportunity to contribute funds directly from your traditional (non-Roth) individual retirement account (IRA) to a qualifying charitable organization. Sometimes referred to as a “qualified charitable IRA distribution,” this giving method allows you to distribute up to $108,000 in 2025 from your traditional IRA account directly to a qualifying organization, such as Z Ministries, Inc. without being taxed on the distribution. (The limit of $108,000 is indexed for inflation annually.) To qualify, the distribution must be transferred directly from your IRA account to the qualifying organization. A check written on your IRA account and made payable to Z Ministries, Inc. is considered a direct transfer. (You cannot withdraw the funds yourself and then make the gift.) Additionally, qualified charitable IRA distributions typically count toward your annual required minimum distributions, if applicable – which generally begin at age 73 under current law. If you are interested in giving to Z Ministries, Inc. from your traditional IRA account, your IRA account administrator can provide information about making a qualified charitable IRA distribution.
In addition to the giving methods described above, there are other tax-advantaged nontraditional giving methods available. Your tax advisor can help you determine the best ways to accomplish your giving objectives while being wise about tax implications.
Thank you for your generous support of Z Ministries, Inc.
Sincerely,
James S. Hoge
President/Founder