How ‘Bunching’ Your Donations Can Help You at Tax Time

Here’s how it works and why it can benefit certain taxpayers.

What is donation bunching?

Donation bunching involves planning your charitable giving so you itemize your deductions every other year.

Many taxpayers are better off taking the standard deduction each year.

But those who consistently give substantial amounts to charity can benefit from donation bunching.

If your total itemized deductions routinely exceed your standard deduction, bunching donations can boost your itemized years.

ThisBunching and Tax Savings Calculatorcan help you determine if bunching contributions might provide you with more tax deductions.

Let’s take a look at an example.

Thestandard deductionfor a married couple filing jointly in 2023 was $27,700.

Therefore, this couple takes the standard deduction in 2023.

In 2024, this couple has the same itemized deductions.

Over the two years combined, they will have deducted around $56,900.

Then, in 2024, they take the $29,200 standard deduction.

The result: $62,200 in deductions in the two years combined.

With this option, the couple has $5,300 of additional tax deductions over the same two-year period.

Donation bunching makes the most sense if:

You give sizable donations exceeding the standard deduction each year.

Your income fluctuates year-to-year.

You won’t lose deductions by alternating between standard and itemized.

Talk to your tax advisor to see if donation bunching could benefit your tax situation.

With some planning, it’s possible for you to optimize your charitable giving.