BUNCHING OF CHARITABLE DONATIONS

For charitably inclined taxpayers one tax efficient strategy is to bunch charitable contributions every other year. Let’s say you decide to double your normal charitable contributions in even years, and minimal amounts in odd years. In the even years you itemize your deductions and include your doubled up amount of charitable donations made. In the odd years (minimal or no charitable deductions are made) so the standard deduction is used. For 2022 the standard deduction is $12,950 for single filers and married filing separately, $25,900 for married filing jointly, and $19,400 for head of household filers. For this strategy to work, the sum of your itemized deductions including the doubled charitable donations will need to be greater than your standard deduction. If you do not want to give the money to charity all at once, contribute to a donor advised fund (this tool allows you to take the charitable donation in the tax year funded) and then make the distributions to charity over time.