Bunching means putting two or more years of giving into one year so that your itemized deductions clear the standard deduction, then taking the standard deduction in the off years. It still works in 2026, but for fewer people than before. Three changes in the One Big Beautiful Bill Act apply to tax years beginning after December 31, 2025: a 0.5% of AGI floor on itemized charitable gifts, a new deduction of up to $1,000 ($2,000 on a joint return) for people who do not itemize, and a cap on the tax value of itemized deductions for top-bracket taxpayers. The first two can erase the gain from bunching for a donor who gives modest amounts every year.
What bunching does
The standard deduction is a free allowance. A couple whose mortgage interest, state taxes and gifts total less than $32,200 (the 2026 joint amount) gets no benefit from the gifts if they itemize. If they give two years of gifts in one year, they may itemize in that year and take the standard deduction in the other. Total deductions over the two years go up, and so does the tax saving.
What changed from 2026
The floor. Itemizers deduct charitable gifts only to the extent the total exceeds 0.5% of their contribution base for the year, which is essentially AGI. On $200,000 of AGI that is $1,000. Unlike a percentage limit, the floor applies every year you itemize, so itemizing twice costs you the floor twice, and itemizing once costs it once. Gifts disallowed by the floor are carried forward only from years in which a percentage limit is also exceeded, so in an ordinary year they are lost.
The non-itemizer deduction. If you take the standard deduction, you can still deduct up to $1,000 ($2,000 if married filing jointly) of cash gifts to qualifying public charities. It is not indexed for inflation, it is not subject to the floor, and it excludes gifts to organizations described in section 509(a)(3) and gifts to establish or maintain a donor-advised fund. It matters here because annual givers who do not itemize now get a deduction in every year, while a bunching donor who gives nothing in the off year gets none in that year.
The 35% cap. For 2026 and later, itemized deductions are reduced by 2/37 of the smaller of the deductions or the income above the point where the 37% bracket begins ($768,700 for joint filers in 2026). A dollar of deduction in the 37% bracket therefore saves 35 cents, not 37. It affects only taxpayers in that bracket. A joint filer with $1,000,000 of income and a $50,000 gift loses $2,703 of deduction to the reduction, so the gift counts as $47,297.
Worked example: when the naive answer is wrong
A married couple filing jointly has $200,000 of AGI and $22,000 of other itemized deductions: state taxes, mortgage interest and medical costs. The 2026 standard deduction is $32,200. They think about giving two years of cash gifts in one year, against giving the same amount each year.
The naive test is simple: add the gifts to the other deductions and see if the total beats the standard deduction.
| Yearly gift | Naive itemized total if bunched | Beats $32,200? | Two-year tax result of bunching |
|---|---|---|---|
| $6,000 | $34,000 | Yes | Costs $440 |
| $8,000 | $38,000 | Yes | Saves $176 |
Both rows pass the naive test. Only the second saves money. The reasons:
- With annual gifts of $6,000, the couple does not itemize in either year, because $28,000 is below $32,200. But each year they take the standard deduction plus the $2,000 non-itemizer deduction, a total of $34,200.
- Bunching $12,000 into one year gives itemized deductions of $33,000 after the $1,000 floor. That is less than the standard deduction plus the $2,000 the couple could claim without itemizing, so they would not itemize at all. The off year then has just the standard deduction, so bunching gives up the $2,000 in the off year and gains nothing in the bunched year.
- At $8,000 a year, the bunched year has itemized deductions of $37,000. With the standard deduction in the off year, deductions total $69,200 over the two years, against $68,400 with annual gifts. That is enough to save $176, after giving up the $2,000 in the off year and paying the floor once.
The threshold for bunching is no longer “does the bunched total beat the standard deduction.” It is whether the bunched total, less the floor, beats the standard deduction plus $2,000 in the bunched year and then still leaves you ahead after the off year. Use the charitable donation optimizer with your own figures.
Using a donor-advised fund
A donor-advised fund (DAF) is what makes bunching practical. You give a lump sum to the fund’s sponsoring organization, deduct it in the year you give, and recommend grants to charities over later years. Charities get a steady flow, and you get the deduction in one year.
Rules that matter:
- Get the acknowledgment. A DAF gift is not deductible without the sponsor’s written acknowledgment that it has exclusive legal control over the assets.
- The deduction is for the year you fund the fund, not the year it grants. Later grants to charities are not new deductions.
- A DAF gift cannot use the non-itemizer deduction. If your plan is to itemize in the DAF year, that does not matter. If it turns out you cannot itemize, the gift earns nothing in 2026, so check the figures first.
- Limits. Cash gifts to public charities are limited to 60% of your contribution base, and gifts of appreciated long-term property to 30%. Amounts over the limit carry forward for up to 5 years.
Giving appreciated stock
Stock you have held for more than a year is capital gain property, and you can generally deduct its fair market value. Stock held a year or less is ordinary income property and its deduction is reduced by the short-term gain. Because long-term stock is subject to the 30% limit rather than 60%, a large bunched gift of stock can leave a carryover. Stock gifts do not qualify for the non-itemizer deduction, which is for cash.
Qualified charitable distributions
If you are 70½ or older, a qualified charitable distribution (QCD) sends money from an IRA directly to a charity. It never enters your income, so it needs no itemizing and is not subject to the floor. The annual limit is $111,000 for 2026. A QCD cannot go to a donor-advised fund. If you are old enough, it is often a better route than bunching for the same gift; see QCDs in 2026 for the rules.
Year-end timing
A gift counts in the year you make it. A check mailed to a charity is considered delivered on the date you mail it, and a bank credit card charge counts on the date you make the charge. A properly endorsed stock certificate counts on the date you mail or deliver it, but one given to your agent or the issuing company for transfer counts only when the shares are transferred on the books. A DAF or broker transfer needs time to process. Start well before December 31.
What to do now
- Add up your likely itemized deductions for 2026 without any charity.
- Add your normal two years of giving and subtract 0.5% of AGI.
- Compare the result with the standard deduction plus $1,000 or $2,000, not the standard deduction alone.
- If bunching still wins, choose the vehicle: a DAF for cash, appreciated stock for the larger gift, a QCD if you are 70½ or older.
- Mail, charge or transfer before the year ends and keep the written acknowledgment.
For other year-end moves, see the year-end tax planning guide, and for the deduction rules in general, see the charitable deduction guide. This is general information about how the rules work, not advice for your situation.