In short
Bunching is concentrating deductible payments, such as charitable gifts or elective medical costs, into alternate years so itemized deductions exceed the standard deduction in those years, with the standard deduction taken in the others.
Key takeaways
- It suits taxpayers whose itemized deductions are close to the standard deduction each year.
- A donor-advised fund lets a taxpayer bunch several years of gifts into one year while granting to charities over time.
- From 2026 the 0.5% floor on itemizers' charitable deductions slightly favors bunching.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Bunching itemized deductions into alternate years is an effective strategy when a taxpayer's: