Charity Bunching: A Smart Tax Strategy for Charitable Donors
Many taxpayers give to nonprofits every year because they believe in supporting organizations whose missions match their values. What many people do not realize is that the timing of those donations can affect the tax benefit they receive.
For 2026, changes to the standard deduction, charitable contribution rules, the SALT deduction and the enhanced deduction for seniors make charitable planning especially important. A strategy called “charity bunching” can still help some taxpayers make their giving more tax-efficient.
What Is Charity Bunching?
Charity bunching means concentrating two or more years of charitable contributions into a single tax year. The goal is to push itemized deductions high enough to exceed the standard deduction in the bunching year, then take the standard deduction in one or more following years.
The strategy does not necessarily mean giving less to charity. It changes when the contribution is made for tax purposes.
The 2026 Standard Deduction Is Higher
For 2026, the basic standard deduction is:
- $16,100 for single filers and married individuals filing separately
- $32,200 for married couples filing jointly
- $24,150 for heads of household
Taxpayers generally compare these amounts with their allowable itemized deductions, including state and local taxes, mortgage interest, charitable contributions and certain medical expenses.
A New Charitable Deduction for Taxpayers Who Do Not Itemize
Beginning in 2026, taxpayers who take the standard deduction may still be able to deduct qualifying cash charitable contributions of up to $1,000, or $2,000 for married couples filing jointly.
That is an important change. It means that saying charitable contributions provide no federal tax benefit to a non-itemizer is no longer generally accurate. However, the new deduction is limited. Taxpayers who give substantially more than $1,000 or $2,000 may still benefit from planning that allows them to itemize in selected years.
The $40,400 SALT Cap Changes the Calculation
The federal deduction for state and local taxes, commonly called the SALT deduction, is capped at $40,400 for 2026 ($20,200 for married taxpayers filing separately), subject to an income-based limitation.
For taxpayers with substantial state income, sales or property taxes, the higher SALT cap may make it easier to reach the itemizing threshold. For others, particularly taxpayers with modest SALT deductions or little mortgage interest, bunching charitable contributions may still be necessary before itemizing produces a meaningful benefit.
There Is Also a New 0.5% AGI Floor for Itemized Charitable Contributions
Beginning in 2026, taxpayers who itemize generally deduct charitable contributions only to the extent their contributions exceed 0.5% of adjusted gross income (AGI).
For example, if a taxpayer has $100,000 of AGI, the 0.5% floor is $500. This new floor is another reason the timing and size of charitable contributions can matter. Concentrating contributions into one year may help produce a larger usable deduction than spreading the same giving evenly over several years.
Example: A Married Couple
Suppose a married couple has $18,000 of deductible state and local taxes, $7,000 of mortgage interest and normally gives $5,000 to charity each year.
Before applying the new charitable contribution floor, their deductions total $30,000. Their 2026 standard deduction is $32,200, so they would generally use the standard deduction instead of itemizing. If their cash gifts qualify, they may also receive up to the $2,000 non-itemizer charitable deduction.
Now suppose they bunch two years of giving and contribute $10,000 in one year. Their deductions before applying the 0.5% AGI charitable floor would total $35,000. Depending on their AGI and other limitations, itemizing may now produce a larger deduction than taking the standard deduction.
The exact benefit must be calculated using the taxpayer’s actual AGI because of the new 0.5% charitable contribution floor.
What About the $6,000 Senior Deduction?
Taxpayers age 65 or older may qualify for a separate enhanced senior deduction of up to $6,000 per eligible individual for 2025 through 2028. A married couple in which both spouses qualify could receive up to $12,000.
The deduction begins to phase out when modified adjusted gross income exceeds $75,000 for a single taxpayer or $150,000 for a married couple filing jointly.
An important distinction is that the enhanced senior deduction is available to qualifying taxpayers whether they itemize or take the standard deduction. Therefore, it should not simply be added to the standard deduction when deciding whether itemized deductions exceed the standard deduction.
For senior donors, the bunching decision should instead compare the standard deduction plus any available non-itemizer charitable deduction with allowable itemized deductions. The separate senior deduction can then be considered in the overall tax calculation.
Using a Donor-Advised Fund
One practical concern with bunching is that nonprofits often depend on steady annual support. A donor-advised fund (DAF) can help separate the timing of the tax deduction from the timing of grants to charities.
A donor might contribute several years of planned charitable giving to a donor-advised fund in the bunching year, subject to the applicable tax rules, and then recommend grants from the fund to favorite nonprofits over the following years.
This can allow the donor to maintain regular support for nonprofits while concentrating the charitable contribution for tax purposes.
Who Should Consider Charity Bunching in 2026?
Charity bunching may be worth examining for taxpayers who:
- Give regularly to qualified charitable organizations
- Have itemized deductions that are relatively close to the standard deduction
- Have moderate SALT and mortgage-interest deductions
- Expect unusually high income or deductions in a particular year
- Want to use a donor-advised fund to maintain regular charitable support
It may be less useful for taxpayers who already itemize by a wide margin every year, or whose giving is small enough that the new non-itemizer charitable deduction provides most of the available benefit.
Final Thoughts
Charity bunching remains a useful planning strategy in 2026, but the calculation has changed. The new deduction for charitable contributions by non-itemizers, the higher standard deduction, the $40,400 SALT cap, the 0.5% AGI floor for itemized charitable contributions and the enhanced senior deduction all need to be considered together.
For regular donors, the question is no longer simply whether to itemize. The better question may be: Which years should I itemize, which years should I take the standard deduction, and when should I make my charitable contributions to get the greatest tax benefit while supporting the organizations I care about?
The article is meant for informational purposes only. Please contact me directly to discuss how this applies to your individual tax situation.