Most taxpayers stopped itemizing after the 2017 tax law doubled the standard deduction. For a married couple, taking $32,200 (the 2026 standard deduction) without tracking a single receipt is easier than assembling itemized deductions that barely exceed that threshold anyway. But there’s a planning technique that changes the math for many people: bunching.

Why the Standard Deduction Changed the Calculus

Before 2017, more taxpayers benefited from itemizing because the standard deduction was lower. Mortgage interest, state and local taxes, and charitable giving would frequently add up to more than the standard amount, making itemizing worthwhile every year.

The TCJA changed two things simultaneously: it raised the standard deduction dramatically and capped the state and local tax (SALT) deduction at $10,000. For many middle- and upper-income earners, particularly homeowners in high-tax states, their itemized deductions now hover just above or just below the standard deduction — making the choice a coin flip each year.

Bunching turns that coin flip into a deliberate strategy.

How Bunching Works

The core idea: instead of spreading deductible expenses evenly across multiple years, you concentrate them into a single year to push your itemized total well above the standard deduction. In the alternate year, you take the standard deduction.

Example: A married couple has $10,000 in SALT (at the cap), $14,000 in mortgage interest, and typically gives $9,000 to charity per year. Their annual itemized deductions total $33,000 — only modestly above the $32,200 standard deduction. The benefit of itemizing is $800 per year.

Now suppose they bunch their charitable giving: instead of $9,000 each year, they give $18,000 in Year 1 and $0 in Year 2. In Year 1, their itemized deductions jump to $42,000 — a $9,800 benefit over the standard deduction. In Year 2, they take the standard deduction. Over two years, they’ve claimed $74,200 in deductions instead of $66,000 — an $8,200 improvement, at zero additional cost.

Charitable Giving: The Most Flexible Lever

Charitable contributions are the most practical bunching tool because the timing is entirely within your control. You can give more this year and less next year without changing your total generosity — just the schedule.

Donor-Advised Funds (DAFs) make this even cleaner. You contribute a large amount to the DAF in a high-deduction year, claim the full charitable deduction immediately, and then distribute the grants to your chosen charities over time — years or even decades later. This separates the tax timing from the actual charity receiving the funds.

For appreciated stock or investment assets, contributing shares directly to a DAF or charity is particularly efficient: you deduct the full fair market value and avoid capital gains on the appreciation entirely. A $50,000 position with a $10,000 basis generates a $50,000 deduction and zero capital gains tax when donated — a significantly better outcome than selling the stock and donating cash.

Medical Expenses as a Bunching Opportunity

Medical expenses are only deductible to the extent they exceed 7.5% of your adjusted gross income. For most people, this threshold is rarely crossed in a single year.

If you have significant elective medical expenses that can be timed — dental work, elective procedures, medical equipment — scheduling them in the same calendar year can push you over the threshold and generate a deduction that wouldn’t exist if the expenses were spread across two years.

This requires advance planning, coordination with your healthcare providers, and a realistic estimate of your AGI for the year. It’s not a strategy for everyone, but for those with predictable large medical expenses, the timing matters.

Prepaying State and Local Taxes

The SALT deduction is currently capped at $10,000 regardless of what you actually pay. Prepaying property taxes into a high-deduction year doesn’t increase your SALT deduction above the cap — it’s already maxed out for most homeowners in higher-cost areas. But in lower-tax states where the cap isn’t fully used, prepaying property taxes owed in January into the prior December can add to itemized deductions in a bunching year.

Note: The IRS has rules about when state and local taxes are deductible. Prepaid income taxes are only deductible in the year they actually apply, but property taxes paid before year-end can generally be deducted in the year paid.

Qualified Charitable Distributions for IRA Owners

Taxpayers age 70½ or older with IRAs have a separate tool: the Qualified Charitable Distribution (QCD). A QCD allows you to transfer up to $111,000 directly from your IRA to a charity in 2026, and it counts toward your Required Minimum Distribution without being included in your taxable income. This limit is indexed for inflation and rises most years — confirm the current-year figure with your advisor before making a distribution.

The QCD doesn’t generate an itemized deduction — instead, the income never hits your return at all. This benefits donors regardless of whether they itemize, making it superior to a regular cash donation for IRA owners who take the standard deduction.

Frequently Asked Questions

Q: Does bunching make sense if I don’t have much flexibility over my deductions?

A: Bunching requires at least one variable expense you can time — most commonly charitable giving. If your deductions are entirely fixed (SALT cap, mortgage interest, no charitable giving), there’s nothing to bunch.

Q: Can I bunch deductions in the same year I have unusually high income?

A: That’s actually the best time to bunch — maximizing deductions in a high-income year produces the most tax savings. If you’re expecting elevated income in 2026, front-loading deductions into 2026 is more valuable than deferring them to a lower-income year.

Q: What’s the deadline for bunching into 2026?

A: Most deductions must be paid by December 31. Charitable contributions must be postmarked by year-end. Checks to a DAF must clear by December 31. Credit card charges are generally deductible when charged, not when paid.

Bunching won’t work for everyone — it requires having deductible expenses that are flexible in timing. But if you’re giving to charity regularly and your itemized deductions are anywhere near the standard deduction, the strategy is worth modeling. A $10,000 improvement in deductions is worth $2,200 to $3,700 in federal tax savings at common marginal rates.

If you’d like to apply this to your situation, the team at Molen & Associates is here to help. Schedule a consultation at molentax.com.