Year-End Giving Tips

As the end of the year approaches, now is a good time to review your charitable giving plans and explore ways to support the University of Maine while potentially reducing your 2026 federal income taxes.

The One Big Beautiful Bill Act (OBBB), enacted in 2025, changed several charitable giving rules for 2026. Here are four strategies to discuss with your tax or financial advisor before December 31.

  1. Make a Cash Gift
    Beginning in 2026, taxpayers who take the standard deduction may deduct up to $1,000 in qualifying cash gifts to eligible charities, or $2,000 for married couples filing
    jointly.

    For taxpayers who itemize, charitable deductions are generally limited to contributions exceeding 0.5% of adjusted gross income (AGI), subject to other requirements. If you are close to the threshold for itemizing, consider bunching planned 2027 gifts into 2026 to potentially increase your deduction.

    Gifts of $1,000 or more also qualify you for membership in the University of Maine President’s Club.

  2. Consider a Donor-Advised Fund
    Want to make a larger gift this year but decide later which charities to support? A donor-advised fund (DAF) lets you contribute now, potentially receive an eligible deduction this year, and recommend grants to qualified charities over time. A DAF can also be useful when combining several years of planned giving into one tax year.

    You can establish a DAF through the University of Maine Foundation or another eligible organization.

  3. Donate Appreciated Securities
    If you own stocks or other investments held for more than a year that have increased in value, consider donating them directly to the University of Maine Foundation.

    Gifts of appreciated securities may qualify for a charitable deduction based on fair market value, subject to applicable limits, while generally allowing you to avoid capital gains tax on the appreciation.

    Plan ahead: Securities transfers can take several weeks, especially during the busy year-end period. Contact your financial advisor in early December to help ensure your gift is completed on time.

  4. Make a Qualified Charitable Distribution From Your IRA
    If you are age 701⁄2 or older, you may be eligible to transfer funds directly from your IRA to the University of Maine Foundation through a qualified charitable distribution (QCD).

    A QCD counts toward your required minimum distribution (RMD) and is generally excluded from federal taxable income. Although you cannot also claim a charitable deduction for the amount excluded from income, a QCD may help reduce your AGI and potentially limit the taxation of Social Security benefits and other income-based tax consequences.

    Please note: If you are still contributing to your IRA after age 701⁄2 there may be an offset to the tax benefit available through IRA QCD.

    Plan ahead: Initiate your QCD well before December 31 and confirm timing with your IRA custodian. The 2026 annual QCD limit is $111,000 per IRA owner.

    Your generosity supports UMaine scholarships, research, academic programs and opportunities for future generations of Black Bears. Talk with your tax or financial advisor to determine which giving strategy best fits your goals.

    Thank you for supporting the University of Maine.