Preparing for the 2027 Tax Season

Year-End Planning and Charitable Giving

Tax season may not be top of mind in October, but the months leading into Thanksgiving and the holidays are an ideal time to plan ahead. As many of us begin thinking about the people, organizations and causes that matter most, it is also worth considering how year-end giving fits into your overall financial picture. The choices you make now—about charitable gifts, income, investments and other financial activity—can have a meaningful effect on your 2026 return, making filing easier and helping you avoid missed opportunities after December 31.

Take a quick look at the year so far

You do not need to wait for your tax documents to arrive. A simple Q4 check-in can help uncover issues while there is still time to address them:

• Compare your expected 2026 income with 2025, including compensation, investments, retirement distributions and business income.
• Review federal and state withholding and estimated tax payments, especially if your income changed during the year.
• Account for significant investment gains that may require additional withholding or an estimated payment.
• Gather records for income, deductible expenses, investments, retirement contributions and charitable gifts before filing season begins.

Think about how you want to give

If charitable giving is already part of your plans, this year brings a few changes and options worth discussing with your advisor:

• People who take the standard deduction may be eligible for a federal deduction of up to $1,000 for qualifying cash gifts, or up to $2,000 for married couples filing jointly.
• If you itemize, charitable contributions generally are deductible only to the extent they exceed 0.5% of adjusted gross income beginning in 2026, making the timing and amount of your gifts especially important.
• Donating appreciated securities directly to a qualified charity may allow you to claim a charitable deduction while avoiding some or all of the capital gain that could result from selling the investment.
• A donor-advised fund may be a good option if you want to contribute now and recommend grants over time. Community foundations, including the Lehigh Valley Community Foundation, can help you and your advisor establish a fund for the causes that matter most to you.
• If you are age 70½ or older, ask about a Qualified Charitable Distribution from an IRA. When requirements are met, the transfer may be excluded from taxable income and can count toward a required minimum distribution when applicable.

Keep your paperwork together

Good records can help prevent delays and questions when it is time to file:

• Save receipts and acknowledgments for every charitable gift.
• Obtain a written acknowledgment for contributions of $250 or more.
• Ask your advisor about additional reporting or appraisal requirements before making a noncash gift.

Have the conversation before year-end

Once January arrives, many planning opportunities are gone. October and November are good times too:

• Talk with your tax advisor about charitable giving, retirement planning, investment transactions and estimated taxes.
• Include both your advisor and the Community Foundation when considering a larger gift so it can be structured appropriately and completed on time.

Planning ahead can make tax season easier and help you approach year-end giving with greater clarity. By reviewing your finances and charitable goals before December 31, you can enter the 2027 filing season prepared and confident that your generosity supports the people and causes that matter most to you.