Bunch Your Donations: Save Big on 2025 Taxes!

Are you missing out on extra tax savings just by donating the same way every year? With 2025 tax brackets and the standard deduction both higher than ever, savvier taxpayers are adopting a strategy called "charitable bunching" to maximize the tax benefit of their generosity.

The Standard Deduction Problem

For 2025, the standard deduction for married couples filing jointly is approximately $30,000. This means your itemized deductions—including charitable contributions, state and local taxes (capped at $10,000), mortgage interest, and medical expenses—must exceed $30,000 before you receive any additional tax benefit.

Many generous donors give consistently each year but never exceed the standard deduction threshold. Their charitable giving, while meaningful to the organizations they support, provides zero additional tax benefit.

How Bunching Works

Instead of giving $10,000 annually, consider giving $30,000 every three years. In the "bunching" year, your itemized deductions exceed the standard deduction, generating additional tax savings. In the other two years, you simply take the standard deduction.

The total charitable giving is identical, but the tax benefit can be thousands of dollars higher.

Donor-Advised Funds: The Bunching Vehicle

Donor-Advised Funds make bunching practical. You contribute a large amount in a single year, receive the immediate tax deduction, then recommend grants to your favorite charities over multiple years. The charities receive consistent support while you optimize your tax deductions.

Appreciated Securities: Double the Benefit

Bunching becomes even more powerful when you donate appreciated securities held over one year. You receive a deduction for the full fair market value while avoiding capital gains tax on the appreciation. For a stock purchased at $10,000 now worth $30,000, donating the shares saves both income tax on the deduction AND the capital gains tax on $20,000 of appreciation.

Is Bunching Right for You?

Bunching makes sense if your regular charitable giving combined with other itemized deductions falls near or below the standard deduction. Your CPA can model various scenarios to determine the optimal strategy for your situation.