Key Takeaways
If you regularly give to charity and your deductions are relatively close to the standard deduction, changing when you make those gifts can potentially reduce your taxes without changing how much you ultimately give.
- Start with the deductions you already have. Property taxes, state and local income taxes, and mortgage interest can put you within striking distance of the standard deduction. The difference between those deductions and the standard deduction is an important number.
- Bunching means concentrating multiple years of charitable gifts into one year. That can create a year when itemizing is worthwhile, followed by a year when you take the standard deduction.
- Beginning in 2026, new charitable deduction rules will make charitable giving slightly less tax-efficient for itemizers, as a portion of annual donations will no longer be deductible. Bunching charitable contributions can help minimize the impact of this limitation.
When Bunching Deductions Can Save You Money
For a married couple filing jointly, the 2026 federal standard deduction is $32,200, according to the IRS’s 2026 inflation adjustments.
That means a couple with $25,000 of itemized deductions generally receives a larger deduction by taking the standard deduction. A couple with $40,000 of itemized deductions would generally itemize.
Charitable giving can move a household from one side of that line to the other.
This creates an opportunity for people who make meaningful charitable contributions each year and already have deductions from expenses such as property taxes, state and local income taxes, and mortgage interest.
Instead of giving the same amount every calendar year, they may be able to make two years of planned charitable gifts in one year. They itemize deductions in that year and take the standard deduction the following year.
The total amount given to charity stays the same, but the timing changes, and that simple timing change can unlock tax savings.
How Much Of Your Charitable Giving Can You Deduct?
Beginning in 2026, people who itemize can no longer deduct every dollar they give to charity. A small portion of their giving does not count toward the itemized deduction.
That amount equals 0.5% of adjusted gross income, or AGI.
Consider a married couple with $200,000 of AGI:
$200,000 × 0.5% = $1,000
If they give $12,000 to charity during the year, the first $1,000 does not generate an itemized charitable deduction. That leaves $11,000 potentially deductible, assuming the contribution otherwise qualifies.
Tax professionals sometimes call this $1,000 amount the charitable deduction floor. We find it easier to think of it as a threshold. The couple has to clear the first $1,000 before charitable giving starts adding to their itemized deductions.
The threshold resets each year, which is particularly important when evaluating bunching.
If this couple gives $12,000 this year and $12,000 next year, they encounter the $1,000 threshold twice.
If they give the entire $24,000 in one year, they encounter the threshold once.
The IRS’s current guidance addresses this new limitation along with another important change: taxpayers who take the standard deduction can now deduct up to $1,000 of qualifying cash charitable contributions, or $2,000 for married couples filing jointly.
How Bunching Works: A Two-Year Example
Let’s put the pieces together.
Consider our married couple with $200,000 of adjusted gross income. Let’s assume our couple has the following deductions each year:
- Qualifying state, local, and property taxes – $25,000
- Mortgage interest – $9,000
Before giving anything to charity, they have $25,000 in potential itemized deductions.
Compare that with the $32,200 standard deduction.
Their regular deductions fall $7,200 short.
Now, let’s assume the couple gives $12,000 to charity each year.
If they continue giving $12,000 annually, the $1,000 charitable threshold leaves $11,000 potentially deductible each year. Add that to their $25,000 of other deductions, and they have $36,000 of itemized deductions each year.
Over two years, they deduct a total of $72,000.
Now suppose they change the timing.
Instead of giving $12,000 this year and $12,000 next year, they give the full $24,000 in Year 1.
After the $1,000 charitable threshold, $23,000 is potentially deductible. Add that to their $25,000 of other deductions, and they have $48,000 of itemized deductions in Year 1.
In Year 2, they make no charitable contribution and take the $32,200 standard deduction.
| Strategy | Year 1 Deduction | Year 2 Deduction | Two-Year Total Deductions |
| Give $12,000 Annually And Itemize | $36,000 | $36,000 | $72,000 |
| Bunch $24,000 Into Year 1 | $48,000 | $32,200 | $80,200 |
| Additional Deductions From Bunching | $8,200 |
The couple gives exactly the same $24,000 to charity under both strategies, but changing the timing of these donations produces $8,200 of additional deductions over two years.
If those additional deductions offset income otherwise taxed at a 22% federal marginal rate, the approximate federal income tax reduction would be $1,804. Of course, the actual tax savings will depend on the household’s complete tax return and the tax rate that applies to the additional deductions, but the example helps illustrate how bunching can reduce your overall tax liability.
A Five-Minute Test To See If Bunching May Work For You
You can get a reasonable first impression of whether bunching deserves further analysis by looking at last year’s tax return.
Start with your recurring itemized deductions before charitable giving. For many homeowners, the largest will be qualifying state and local taxes, property taxes, and mortgage interest.
Then compare that number with the standard deduction.
Suppose your regular deductions total $27,000 and your standard deduction is $32,200. You have a $5,200 gap.
Next, consider how much you normally give to charity and calculate your charitable threshold. Multiply your AGI by 0.5%.
Someone with $200,000 of AGI has a $1,000 threshold. Someone with $300,000 of AGI has a $1,500 threshold. At $500,000 of AGI, the threshold is $2,500.
From there, you can test whether putting two years of charitable gifts into one calendar year would create enough deductions to make itemizing worthwhile, followed by taking the standard deduction the next year.
Other Deductions Can Sometimes Be Bunched Too
Charitable contributions usually provide the cleanest opportunity because taxpayers often have some control over when they give. However, some other deductions may be eligible for bunching. Medical expenses are one example of this.
Qualifying medical expenses generally become deductible only after they exceed 7.5% of AGI. If you already expect unusually high medical expenses during a particular year, scheduling other legitimate medical expenses during that same year may increase the amount you can deduct.
Qualified long-term care insurance premiums can also count toward medical expenses, subject to annual age-based limits.
Retirees Should Compare Bunching With QCDs
IRA owners age 70½ or older have another charitable strategy worth considering before bunching contributions.
A qualified charitable distribution, or QCD, allows an eligible IRA owner to send money directly from an IRA to an eligible charity. When the requirements are met, the distribution is generally excluded from taxable income and can count toward a required minimum distribution.
For some retirees, reducing taxable income through a QCD can provide more value than claiming an itemized charitable deduction.
We explain the rules and planning opportunities in greater detail in our guide to qualified charitable distributions.
Make Charitable Timing Part Of Your Tax Planning
Bunching deductions is ultimately a timing strategy. If your property taxes, state and local taxes, mortgage interest, and other regular deductions leave you relatively close to the standard deduction, charitable giving may create an opportunity to increase your deductions by concentrating gifts into certain years.
The first step is simple: find the gap between your regular deductions and the standard deduction.
Then look at how much you give to charity and how the 2026 charitable threshold affects those gifts.
At True Wealth Design, we integrate tax planning with investment, retirement, estate, and charitable decisions so families can evaluate these opportunities as part of their broader financial plan.
If your deductions regularly land near the standard deduction, contact a True Wealth Design professional to determine whether changing the timing of your charitable giving could improve your tax outcome.
This article is for educational purposes only and is not intended as individualized tax, legal, or investment advice. Tax laws and individual circumstances vary. Consult your tax and financial professionals regarding your specific situation.
