As year-end approaches, charitable giving can play a key role in overall tax and estate planning—especially under the One Big Beautiful Bill Act (OBBBA). The legislation increases the standard deduction to $15,750 for single filers and $31,500 for married couples in 2025, with higher amounts available for taxpayers aged 65 and older. 

A planning technique known as “bunching” charitable contributions can help taxpayers make the most of itemized deductions. For example, a client who typically donates $12,000 annually may choose to contribute $36,000 to a donor-advised fund (DAF) at their Community Foundation in 2025. This larger, one-time gift may allow itemizing deductions in that year, while future annual grants from the DAF continue to support charitable causes.

This strategy can be useful in light of higher standard deductions, allowing donors to time gifts for greater tax efficiency without altering long-term philanthropic goals.

Example: Michael and Laura

Ages: 62 and 60

• Residences: New York City and Naples, Florida
• AGI: ~$225,000 (pension, investments, consulting income)
• Net Worth: ~$6.5 million
• Annual Charitable Giving: ~$12,000
• Goal: Maintain consistent charitable support while managing taxable income efficiently during semi-retirement.

Scenario:
With the 2025 standard deduction at $31,500 for couples, their $12,000 annual giving would not exceed the threshold for itemizing. By contributing $36,000 to a DAF in 2025—representing three years of gifts—they can itemize that year and take the standard deduction in subsequent years while the DAF continues distributing funds.

Looking Ahead to 2026:

• Charitable deductions will be limited to contributions exceeding 0.5% of adjusted gross income (AGI).
• High-income taxpayers will have their maximum deduction benefit capped at a 35% marginal rate, down from 37%.

This means a couple with $225,000 in AGI would see a $1,125 reduction in deductible charitable contributions. Bunching before 2026 can help capture current benefits before these limits apply.

Example: Eleanor – The Retired Widow

• Age: 74
• Location: Boston
• AGI: ~$140,000
• Net Worth: ~$3.2 million
• Philanthropy: ~$8,000 annually

In 2025, Eleanor contributes $24,000 to a DAF, surpassing the $15,750 standard deduction for single filers and enabling her to itemize that year. For 2026–2027, she can revert to the standard deduction while maintaining regular charitable distributions from her DAF.

This approach allows her to:

• Align charitable giving with upcoming tax law changes.
• Simplify annual donation tracking.
• Retain flexibility for future legacy gifts.

Planning Takeaway

With OBBBA’s higher deductions in 2025 and tighter charitable limits beginning in 2026, affluent families have a time-sensitive window to review giving patterns. Evaluating bunching strategies and donor-advised funds can help align charitable intent with tax-efficient planning—a key component of integrated WealthDoneR.I.T.E. strategy across Tax and Estate disciplines.

Schedule a consultation to discuss how charitable bunching and donor-advised funds can fit into your personalized plan.

For Informational Purposes only and not for legal or tax advice.

About the Author – Marie Feindt, JD 

Marie Feindt is the Planning Specialist – Estate Attorney at Members’ Wealth, a boutique wealth management firm that offers a comprehensive and holistic approach to serving individuals, families, business owners, and institutions. The firm’s goal is to preserve and grow its clients’ wealth to endure over time, while thoughtfully evolving its strategy to suit an ever-changing world. With over 20 years of estate planning experience, Marie and the Members’ Wealth team thrive on bringing clarity and confidence to clients’ unique situations. She believes everyone, young adults and older, need the essential documents to conserve and preserve and transfer assets accumulated during lifetime to the next generation.

Marie received her JD from Widener University School of Law, her bachelor’s degree from Penn State University, University Park and is currently enrolled in the Villanova University Charles Widger School of Law Graduate Tax Program.

Marie is an Adjunct Faculty at the Villanova University College of Professional Studies Paralegal Professional Certificate Program where she teaches Estates & Trusts and Civil Procedure & Litigation and Torts & Personal Injury Law.

Marie volunteers for a monthly legal clinic at The Salvation Army in Chester, PA facilitated by the Christian Legal Clinic of Philadelphia. She has served on the Women’s Commission of Delaware County and as a Board Member for the Delaware County Literacy Council.

Marie enjoys biking, reading, yoga and walking in her free time with her husband and three children.

To get in touch with the Members’ Wealth team today, I invite you to email info@memberswealthllc.com or call (267) 367-5453. 

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