How to Do Charitable Bunching

How to do Charitable ‘Bunching’

When the new tax law went into effect, the federal standard deduction doubled. For many tax payers, this will eliminate the need to itemize deductions.

What is Bunching?

With “bunching,” you make 2-3 years’ worth of charitable contributions in a single tax year. The goal is to exceed the standard deduction that year so you can itemize your taxes. Then during the years you don’t give to charity, you take the standard deduction.

How a donor advised fund makes bunching even more attractive

A gift to a donor advised fund is immediately tax deductible, because the fund is managed by a nonprofit.

By using a donor advised fund you can direct the money to your favorite causes on a time frame that works best for you. When you do it this way, the charities that you support won’t feel the up and down effects from your bunching strategy.

Plus, your money in the donor advised fund is invested and grows tax free, which helps maximize your giving.

Reach out to Ries and Associates to learn more about how to bunch your giving.