Year-End Planning Tip: Bunch Your Charitable Gifting

If you normally claim the standard deduction instead of itemizing deductions, you may want to consider whether bunching the charitable contributions you would typically make over two years into one year would allow you to itemize that year and deduct a larger amount.

For example, let’s say a married couple typically donates $12,000 per year, but their only other itemized deduction is $10,000 for the state and local taxes paid. With their itemized deductions totaling $22,000, the couple is better off claiming the $24,400 standard deduction – or are they? If they donated $24,000 every other year instead of $12,000 every year, they could deduct $34,000 every other year itemizing their deductions. And in those years when they are not donating, they would simply claim the standard deduction.

If you decide to bunch your charitable contributions, a donor-advised fund may be helpful. With a donor-advised fund, you can take an immediate charitable deduction for amounts you contribute to your donor-advised fund account during the year and then spread out your grant recommendations over several years.

For more information about donor-advised funds see also:

To find out more about donor-advised funds or other charitable options, contact Copper Leaf Financial. With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life – including charitable giving management. Call us today at 802.878.2731 to schedule a strategy session and begin building your road map to financial success.
Article published in November 2019 edition of Eye on Money. If you would like to be added to our mail list please email jennifer@dh-cpa.com.