With the doubling of the standard deduction made permanent by the One Big Beautiful Bill Act (OBBBA), the number of taxpayers who itemize deductions will continue to be limited. In 2017, nearly 30% of taxpayers itemized. But, with the larger standard deductions, only approximately 10% of taxpayers will itemize this year.

The standard deduction doubled in 2018 to $24,000 for married couples and $12,000 for individuals. The married standard deductions increased to $32,200 in 2026 and $33,200 in 2027. Individual standard deductions are one-half the married number. Seniors age 65 and older receive the added senior deduction of $2,050 single and $1,650 per qualifying married spouse.

For tax years 2026 to 2028, seniors receive an enhanced deduction of $6,000. The $6,000 deduction phases out at a rate of 6% of the excess amount for single persons with incomes over $75,000 and married couples with incomes over $150,000. The deduction is fully phased out for single persons with incomes over $175,000 and married couples with incomes over $250,000. A single senior with $60,000 of income would have a standard deduction of $16,100, the existing $2,050 senior deduction and an additional $6,000, for a total itemized deduction of $24,150.

What tax planning strategy might benefit generous taxpayers who know there is a large standard deduction and still desire to help a favorite charity? Let’s consider the options for two generous families with $150,000 of joint income: a) John and Mary and b) Harry and Susan.

In 2026, a couple may donate cash up to $2,000 and deduct it in addition to taking the standard deduction. If they itemize, they are able to deduct their charitable gifts over $750 (1/2 of 1% of their income is not deductible). If an itemizing couple gives $15,000 to favorite charities this year, their itemized charitable deduction will be reduced to $14,250.

Both couples pay $9,000 in state and local taxes and $7,000 in home mortgage interest. John and Mary have total itemized deductions of $30,250 this year.

Because the standard deduction is larger than the $30,250 in itemized deductions, John and Mary plan to take the $32,200 standard deduction in 2026 and $33,200 amount in 2027. Their total deductions over two years are $65,400. If they make charitable gifts of $15,000 each year, they will be able to add the additional $2,000 deduction each year, for a total of $69,400.

Harry and Susan decide to “bunch” their charitable deductions. They give $30,000 in 2026 and nothing in 2027. Because their 2026 itemized deductions of $45,250 are more than the standard deduction, they elect to itemize their deductions. In 2027, they take the standard deduction of $33,200. Their total deductions are $78,450.

Bunching Charitable Deductions

By “bunching” their deductions, Harry and Susan increase their tax federal and state savings from their charitable gifts based on $9,050 in increased deductions.

Editor’s Note: If the combined state and local tax, home mortgage interest and charitable gift deductions are close to the married or individual standard deductions, it may be beneficial to visit with a tax advisor about “bunching” your charitable gifts. Making larger charitable gifts every other year could be an excellent tax-saving strategy.