As you finalize your tax return, charitable giving is likely top of mind. You may be gathering last-minute documentation, reviewing contributions, or connecting with your CPA to ensure everything is in order.
While it’s tempting to check this off your list and move on once your return is filed, this moment, right before the deadline, is actually an ideal time to pause and reflect. With the details still fresh, you have a valuable opportunity to identify what worked well and where small adjustments could make a meaningful difference next year.
This is especially important as tax laws continue to evolve. Planning ahead, rather than waiting until year-end, can help you maximize both your philanthropic impact and your financial outcomes.
Here are a few common pitfalls donors encounter during tax season and how RSF Foundation can help you get ahead for 2026 and beyond.
Giving Cash Instead of Appreciated Assets
Many donors default to giving via cash or credit card, especially when making contributions close to the deadline.
The pitfall: Selling appreciated assets to then donate cash can trigger capital gains tax on the profit.
A more strategic approach: Donating appreciated assets, such as stocks, mutual funds, or real estate held for more than one year, directly to a fund at RSF Foundation or another qualified charity may allow you to avoid capital gains tax and deduct the full fair market value if you itemize.
Missing Opportunities to “Bunch” Donations
With the standard deduction remaining relatively high, some donors may not realize the full tax benefit of their charitable contributions.
The pitfall: Spreading donations evenly year to year without exceeding the standard deduction threshold.
A more strategic approach: “Bunching” multiple years of giving into a single tax year, often through a donor advised fund, can help you surpass the standard deduction and maximize your tax benefit in that year, while still supporting charities over time.
Pro tip: Planning early is especially important as charitable deductions may be subject to additional limitations, including a 0.5% “floor” and a 35% cap. A conversation with your tax advisor now can help you build a more effective strategy for the year ahead.
Read more about bunching in our blog: A Smarter Way to Give: How “Bunching” Can Increase Your Impact and Your Tax Efficiency
Incomplete or Missing Documentation
As you finalize your return, documentation becomes critical. Sadly, many donors fail to keep adequate records, leading to potential deductions being disallowed by the IRS.
The pitfall: Missing written acknowledgments for donations over $250 or lacking bank records for smaller gifts.
The risk: Without documentation, even genuine donations can be disallowed upon audit.
Getting organized now can save time, reduce stress, and help ensure your contributions are fully recognized.
Additional Considerations
Beyond these common challenges, donors often encounter a few other surprises during tax season:
- Overlooking IRA Qualified Charitable Distributions (QCDs): If you are age 70½ or older, you may be able to donate directly from your IRA to satisfy required minimum distributions without increasing taxable income.
- Donating to non-qualified organizations: Contributions to organizations that are not 501(c)(3) nonprofits are not tax-deductible.
- Overvaluing non-cash donations: Items such as clothing or vehicles must be valued at fair market (resale) value, not original purchase price.
Plan Ahead for a Smoother Tax Season
As you complete this year’s filing, consider how a more proactive approach could simplify next year. Thoughtful planning now can help you stay organized, reduce stress, and make the most of your charitable giving.
Make next year’s tax season simpler and your giving stronger. Reach out to the Rancho Santa Fe Foundation at connect@rsffoundation.org to explore personalized strategies that elevate your philanthropy.
