What is a Charitable contribution bunching strategy?
A charitable contribution bunching strategy consolidates multiple years of giving into a single tax year, pushing total itemized deductions above the standard deduction threshold. Rather than spreading donations evenly, taxpayers concentrate their contributions in alternating years to claim the full itemized deduction. In off years, they claim the standard deduction. This approach works well with a donor-advised fund, which allows an immediate deduction while distributing grants over time. Taxpayers often coordinate bunching with Tax loss harvesting in high-income years to maximize their tax savings.
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