By Harry Prabandham · Updated September 28, 2026
Tax Planning
Bunching Charitable Deductions Under the 2026 Tax Rules
Bunching puts several years of giving into one year so itemized deductions beat the standard deduction, often using a donor-advised fund.
Bunching Charitable Deductions Under the 2026 Tax Rules
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What is charitable bunching?
- It means giving two or more years of donations in one year so itemized deductions exceed the standard deduction that year.
- In other years you take the standard deduction, $16,100 single or $32,200 married filing jointly in 2026.
- A donor-advised fund lets you deduct the bunched amount now and recommend grants to charities over time.
- Total giving can stay the same; only the timing of the deductions changes.
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What is charitable bunching?
- It means giving two or more years of donations in one year so itemized deductions exceed the standard deduction that year.
- In other years you take the standard deduction, $16,100 single or $32,200 married filing jointly in 2026.
- A donor-advised fund lets you deduct the bunched amount now and recommend grants to charities over time.
- Total giving can stay the same; only the timing of the deductions changes.
How did the July 2025 tax law change bunching?
- Starting in 2026, itemized charitable deductions count only above 0.5% of AGI, a floor that bunching absorbs once instead of every year.
- For taxpayers in the 37% bracket, the tax benefit of itemized deductions is capped at a 35% rate.
- Non-itemizers can now deduct up to $1,000 ($2,000 joint) of cash gifts to public charities.
- Gifts to donor-advised funds don't qualify for that non-itemizer deduction, but direct cash gifts in off years can.
How do donor-advised funds fit in?
- Contributions are deductible in the year made, up to 60% of AGI for cash and 30% for appreciated securities.
- Donating long-term appreciated stock generally avoids capital gains tax and deducts fair market value.
- Gifts to a donor-advised fund are irrevocable, and the sponsor has legal control over grants.
- Deductions above the AGI limits carry forward for up to five years.
When does bunching tend to fit?
- In unusually high-income years, such as a liquidity event, large RSU vest, or bonus year.
- When itemized deductions land near the standard deduction in most years.
- When SALT, mortgage interest, and giving together clear the standard deduction; the 2026 SALT cap is $40,400, phasing down above $505,000 of MAGI.
- When the giving pattern can tolerate uneven timing of cash reaching the donor-advised fund.
How do qualified charitable distributions compare?
- At 70½ or older, you can send up to $111,000 in 2026 directly from an IRA to charity.
- QCDs are excluded from income, count toward RMDs, and help even if you don't itemize.
- Because a QCD isn't a deduction, the 0.5% floor and the 35% cap don't apply to it.
- QCDs can't go to donor-advised funds or private foundations.
What are the trade-offs?
- Charities receive uneven support unless grants from a donor-advised fund smooth it out.
- AGI limits can cap the deduction in the bunching year.
- California doesn't follow many federal changes, so state results can differ.
- Modeling both years before committing shows whether bunching adds anything.
Key takeaways
- Bunching concentrates giving so itemizing pays off in alternate years.
- The 0.5% AGI floor in 2026 makes bunching more useful for itemizers.
- Donor-advised funds separate the deduction year from the grant years.
- QCDs remain a separate option at 70½; confirm the numbers with your CPA.
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