Tax-Savvy Ways to Support Charities and Family

Stephanie Marini explains that the One Big Beautiful Bill Act changes charitable deductions in 2026. People taking the standard deduction can deduct up to $1,000 of cash gifts, or $2,000 for married couples filing jointly, but the gift must go directly to a charity rather than a donor-advised fund and cannot be appreciated stock. Itemizers face a new 0.5% of adjusted gross income floor: with $200,000 of AGI, the first $1,000 of giving produces no deduction. Itemizers also face a 30% of AGI limit, with excess contributions generally carried forward for up to five years.

For a hypothetical $10,000 charitable gift, Stephanie says selling $10,000 of NVIDIA stock creates both a charitable deduction and potentially significant capital-gains tax, whereas donating the long-term appreciated shares avoids the gain while preserving the deduction for an itemizer. The shares must have been held more than a year; non-itemizers still avoid the capital gain, though they receive no deduction. Donors can immediately repurchase the stock at a higher basis. A donor-advised fund accepts appreciated stock, provides the deduction when funded, lets the donor choose charities later, and can support bunching several years of gifts into one year. 2026 standard deductions are $16,100 single, $24,150 head of household, and $32,200 joint.

People at least 70½ with traditional IRAs can make a qualified charitable distribution directly to an eligible charity. Stephanie says the amount is excluded from taxable income and offsets required minimum distributions dollar for dollar, but it cannot also be claimed as a charitable deduction. The 2026 QCD limit is $111,000 per person. Robert notes that the strategy can help retirees with large RMDs, but QCDs must come from an IRA, not a 401(k); moving some retirement money to an IRA after retirement may therefore be useful. The distribution must be reported correctly or it can be treated as taxable.

Stephanie’s rule is to document everything and retain any paperwork the charity provides. For appreciated stock, donors need records showing the purchase date and cost basis to establish long-term ownership, and they must file Form 8283. Documentation should last at least three years or through the period when a carried-forward deduction is used, whichever is longer. Robert adds that donors should tell the charity to expect transfers from Fidelity, Vanguard, Schwab, or another financial firm so the charity can identify the donor. QCDs likewise require careful tax-return reporting.

Stephanie describes opening a brokerage account for her first nephew after working at a bank made compounding and financial struggles more tangible. Instead of competing with grandparents’ inexpensive toys, she and the child’s parents started with roughly $50 Christmas and birthday contributions, initially invested in an S&P 500 ETF. Now a teenager, her nephew watches the account grow and has chosen individual stocks such as Roblox. Robert says he and his wife used a similar approach for their children, beginning with S&P 500, international-stock, and small-cap index funds before allowing individual-stock choices.

For 2026, each person can give $19,000 per recipient annually; a married couple could give $38,000 to each niece or nephew. Amounts above the annual exclusion require Form 709 and reduce the $15 million per-person or $30 million-per-couple lifetime gift and estate exemption, but generally do not create current tax. A 529 plan permits a five-year lump-sum election—$95,000 per person or $190,000 per couple—and also requires Form 709. For minors, the first $1,350 of unearned income is tax-free, the next $1,350 is taxed at the child’s rate, and income above $2,700 uses the parent’s rate. Gifted stock carries its original basis to the recipient; loss-position shares may be better sold by the giver first. The speakers also mention Roth IRAs for recipients with earned income and caution that Trump accounts may not be ideal for ordinary family gifts.