New tax rules could reward your donations—if you play it smart

If you've ever donated to a cause thinking, "Hey, at least it's tax-deductible," it might be time to refresh that assumption. The landscape of charitable tax deductions is shifting again, and for Gen Z, gig workers, and crypto-savvy donors, the updates in 2025 could either be a long-awaited win or another maze of fine print. Here’s everything you need to know about the new rules on tax breaks for charitable giving—what's changing, who it helps, and how to get your donation game together before tax season hits.

Let’s rewind. Back in 2017, the Tax Cuts and Jobs Act doubled the standard deduction. That sounded great until it made itemizing deductions less attractive for most people. The result? Millions of taxpayers who used to deduct charitable donations saw those tax benefits disappear overnight. If you weren't giving more than the standard deduction threshold, your donations meant zip to the IRS.

Then COVID happened. In response, Congress added a temporary above-the-line deduction—$300 for individuals, $600 for couples—that let even non-itemizers claim a small deduction. But that expired in 2021. Since then, donors without big-ticket giving habits have been stuck without meaningful tax relief.

Now, as new proposals surface in Congress and IRS officials draft more specific rules for crypto and digital donations, we’re about to see another reshuffling.

Multiple proposals are in play, but the most likely changes include:

1. A revived above-the-line deduction. This would allow non-itemizers to deduct a limited amount of charitable giving again. We're talking something like $300 per filer or $600 per couple—not game-changing, but a signal that small givers matter.
2. Higher income thresholds for deduction caps. Previously, donors could deduct up to 60% of their adjusted gross income (AGI) for cash donations. That dropped post-COVID, but lawmakers are now pushing to bring back the higher cap, which benefits high-earning philanthropists.
3. Tighter documentation for non-cash and crypto donations. Think IRS Form 8283 and independent appraisals. Donating your JPEG NFT in 2021 was chill. In 2025? Better have your valuation method locked in.
4. Digital donation platforms under scrutiny. Apps like GoFundMe, Venmo, or Givebutter may be asked to provide clearer distinctions between personal gifts and tax-deductible donations.

All this means that what you give, how you give, and whether you get a deduction is about to depend on a lot more than good vibes.

Gen Z and younger millennials are increasingly active donors, but not in the traditional sense. They use platforms like Twitch, Patreon, or TikTok livestreams. They give $5 here and there, often to people or causes that aren’t IRS-certified charities. But here’s the kicker: Gen Z is actually the only generation with rising donation participation year-over-year, according to GivingTuesday’s 2023 survey.

This new wave of giving doesn’t always align with IRS rules. Donations to mutual aid groups, political activists, or individual fundraisers typically don’t count as deductible. If the 2025 rules expand deductions for smaller cash donations, Gen Z stands to benefit—but only if they start tracking their gifts properly.

Before you get excited, let’s be clear about the boundaries:

• Giving to a friend’s emergency via Venmo? Not deductible.
• Donating to political campaigns or lobbying orgs? Nope.
• Sending crypto to an unregistered mutual aid fund? Again, no.
• Buying merch from a nonprofit? Only the portion above fair market value is deductible.

IRS recognition of 501(c)(3) status is the bare minimum. Without it, your donations are emotionally generous but financially invisible.

Getting ahead of these changes doesn’t mean hiring a tax pro or overhauling your finances. It means creating a basic system. Here’s how to prep like a pro:

Step 1: Save every receipt. Got an email confirmation from a charity? Screenshot it. Donated crypto? Export the transaction. If above-the-line deductions return, you’ll want proof for every penny.

Step 2: Choose smarter platforms. Look for donation portals that offer tax tracking. Paypal Giving Fund, JustGiving, and The Giving Block for crypto donations all send automatic tax receipts.

Step 3: Give in fewer, larger chunks. If you’re near the itemization threshold, it may make sense to bunch your giving into one tax year. That strategy, known as “bunching,” is how many high-income givers claim deductions without going overboard annually.

Step 4: Know the charity status. Use the IRS Exempt Organizations search tool to check if your chosen nonprofit qualifies. No status, no deduction.

Step 5: Rethink how you give. Subscribing to a Patreon creator is cool, but if you want tax credit, consider also giving to a 501(c)(3) doing similar work. You can still support people—just diversify your giving.

Let’s talk about your Ethereum donations. Or that Solana transfer to a nonprofit DAO. These aren’t invisible anymore.

The IRS now requires fair-market-value reporting on all crypto donations. Anything over $500 needs Form 8283. Over $5,000? You’ll need an independent appraisal. Some platforms, like The Giving Block, help facilitate this with built-in valuations. But if you’re donating directly from a wallet to a charity address, you're on your own.

Donors in the Philippines and GCC markets where crypto use is high should note: local tax authorities are watching what the IRS does. Expect similar enforcement measures within a year or two.

Donating without documentation won’t land you in jail—but it also won’t help you at tax time. You’re essentially giving up free deductions. Worse, if you do try to claim a deduction without proper proof and get audited, you could face penalties or have your entire refund held up. Not worth it.

Also: if you’re stacking crypto losses and want to offset them with charitable giving, don’t. The IRS doesn’t allow double dipping. You either donate it and deduct the fair market value—or you sell at a loss and claim the capital loss. Not both.

This isn’t just about saving a few bucks. These new rules represent something bigger: a recalibration of how society values small givers. If Congress reinstates even small deductions for non-itemizers, it's a rare policy signal that low-income and digital-native donors deserve recognition, too. It also pressures platforms to make it easier to track, verify, and reward that generosity.

In the long run, that might change how people give. Not just for the tax break, but for impact that’s visible in both community outcomes and personal finances.

If the new rules on tax breaks for charitable giving pass in 2025, they could be the best thing to happen to small donors since the COVID-era relief. But the IRS isn’t exactly going to walk you through it on TikTok.

So build a donation system. Use tools that give you receipts. Stick to verified charities when it matters. You don’t need to be a philanthropist to make a difference—or to get rewarded for it. Honestly? It’s not just about being generous. It’s about being smart while you’re at it.