Bunching deductions means intentionally timing certain deductible expenses so they land in the same tax year, pushing your itemized total above the standard deduction so you can benefit from itemizing. You itemize in that “on” year and take the standard deduction in the other years. Bunching allows filers to itemize in “on” years when itemized expenses are high, and take the standard deduction in “off” years when itemized expenses are low.
Key Takeaways
- Works best when deductions fluctuate year to year and hover near the standard deduction threshold
- Charitable giving is the most flexible lever for most retirees
- Needs to be coordinated with your income picture, including RMDs and Medicare premiums
- A donor-advised fund can help you bunch now and give over time
Why Bunching Can Help
Standard Deduction vs. Itemizing
Every year, you choose between two options when filing your federal taxes: take the standard deduction or add up your qualifying itemized expenses and deduct those instead. You go with whichever is larger.
Tax reform has increased the standard deduction in 2025 to $15,750 for single filers and $31,500 for married filing jointly. For most retirees, that is a high bar to clear in any single year.
If your charitable donations, mortgage interest, state and local taxes, and medical expenses add up to less than your standard deduction, itemizing does you no good. You take the standard deduction and move on. The problem is that when you spread expenses evenly across multiple years, you may fall just short of the threshold every single year and never benefit from itemizing at all.
That is where bunching comes in. You might choose to bunch deductible expenses into one year to maximize itemized deductions or spread them evenly to take advantage of the higher standard deduction annually. The key insight is that the math works better in your favor when you concentrate deductions rather than spread them thin.
Here is a simple way to think about it. Say you typically have $22,000 in annual deductions as a married couple. That falls below the standard deduction, so you take the standard deduction every year and get no additional benefit from your charitable giving or other deductible expenses. But if you shift two years of charitable donations into a single year, you might push your deductible total to $34,000 or more, well above the threshold. You itemize that year and take the standard deduction the next. Over two years, your total deductions are higher than if you had split things evenly.
Common Items People Bunch
Charitable Donations
Charitable giving is by far the most practical and flexible lever for most retirees. Unlike medical expenses, you have significant control over when you make a gift.
By grouping charitable contributions for multiple years together into a single tax year, you can exceed the standard deduction and take advantage of valuable itemized deductions.
The most common approach is to double up or triple up on your giving in a single year. If you normally give $8,000 annually, contributing $16,000 or $24,000 in one year and then nothing in the following year or two keeps your total giving the same but concentrates the tax benefit.
A donor-advised fund (DAF) makes this even easier. You contribute a large amount to the DAF in one year, claim the full deduction upfront, and then recommend grants to your favorite charities over time at whatever pace you choose. You can contribute more than one year of your planned charitable donations to a donor-advised fund in a single year, and the full contribution can be eligible for a tax deduction in the year you make the donation. The charities still receive their gifts on your preferred schedule, and you get the deduction when it does the most good.
One important note for retirees age 70 and a half or older: a qualified charitable distribution (QCD) is a different strategy worth knowing about. QCDs reduce taxable income directly because donations go straight from your IRA to a qualified charity, helping lower your adjusted gross income while meeting required minimum distributions. A QCD works differently from bunching because it reduces your AGI regardless of whether you itemize. The two strategies serve different purposes, and in some cases they complement each other. Both a donor-advised fund and a qualified charitable distribution can offer benefits for retirees who want to maximize their charitable donations and potentially receive tax benefits. Your advisor can help you figure out which fits better given your income, account types, and charitable goals.
Medical Expenses
Medical expenses can also be bunched, though it takes more planning and is generally harder to control on a precise timeline.
The IRS only allows you to deduct the portion of medical expenses that exceeds 7.5% of your adjusted gross income (AGI). That means if your AGI is $80,000, the first $6,000 of medical costs gives you nothing. Only what is above that floor counts toward your itemized deduction.
To maximize medical expense tax deductions, many use a bunching strategy, timing elective procedures such as LASIK, dental implants, or hearing aids so they all occur in a single calendar year. By concentrating expenses, you are more likely to surge past both the 7.5% floor and the standard deduction limit.
If you have been putting off dental work, new hearing aids, vision correction, or other elective but necessary procedures, scheduling them in the same year can make a meaningful difference. The deduction applies to the year you paid, not necessarily the year you received the care. Front-loading medical expenses into a single tax year maximizes the likelihood of exceeding the AGI threshold, whereas spreading them across multiple years may prevent any tax benefit from materializing.
Keep in mind that medical expenses work best as a bunching category when combined with charitable donations. On their own, they often are not enough to push a retiree over the standard deduction. Together, they can get there.
Other Itemized Categories
A few other deduction categories can round out your itemized total in a bunching year, depending on your situation.
State and local taxes (SALT) are currently capped at $10,000 per year for itemizers, so they are not a flexible lever but can still contribute meaningfully to your total. Mortgage interest, if you still carry a home loan, counts as well. For some retirees, a combination of modest mortgage interest, a partial SALT deduction, and concentrated charitable giving is enough to cross the threshold in an “on” year.
Property taxes are worth noting specifically. In the past, some people regularly paid two years of property taxes in one year and itemized those deductions, then used the standard deduction in the following year. Under the right circumstances, this reduced total income taxes over a two-year cycle. The current $10,000 SALT cap limits how much this strategy can do, but for some taxpayers, prepaying property taxes in December can still contribute to pushing an “on” year over the threshold.
How to Plan Bunching Without Creating Other Issues
Bunching deductions sounds straightforward, but it needs to be thought through as part of your complete income picture. Moving expenses around on the calendar does not exist in a vacuum.
Avoiding Income Spikes
One of the biggest risks with bunching is accidentally triggering higher taxes or higher Medicare premiums in the year you itemize. If you are concentrating deductions in a high-income year, that could work well. But if bunching a large charitable contribution or accelerating a Roth conversion happens to push your income significantly higher, you could land in a higher tax bracket or trigger an IRMAA surcharge on your Medicare premiums.
IRMAA surcharges are reaching new peaks, and because of the program’s unique cliff structure, being one dollar over a threshold can cost a client thousands of dollars. Your sources of income can be more expansive than the paycheck you bring home during your working years, and a rise in one of these could trigger an unexpected premium increase.
Medicare’s IRMAA surcharge is based on your income from two years prior. Your 2024 income determines your 2026 IRMAA level. That lag matters. A large Roth conversion or unusual income event in one year shows up as higher Medicare premiums two years later.
The goal in a bunching year is to increase your deductions, not your income. These are two different levers, and getting both pointed in the right direction is what good planning looks like.
Coordinating with RMDs and Conversions
At age 73 and beyond, RMDs begin driving taxable income. Qualified charitable distributions can help reduce taxable income and assist in managing IRMAA exposure.
If you are already taking RMDs, your taxable income is less flexible. A QCD can reduce the income side of the equation while a DAF-based bunching strategy addresses the deduction side. Used together, these tools can work well for charitably inclined retirees.
Common mitigation tactics include qualified charitable distributions to reduce taxable income, timing Roth conversions during low-income years, harvesting losses, and considering whether to take the IRMAA hit for a limited two-year period.
The bigger picture is this: bunching deductions is a piece of a larger retirement tax strategy, not a standalone move. It works best when it is coordinated with decisions about when and how much to withdraw from different accounts, whether and when to do Roth conversions, and how to manage your exposure to income-based Medicare surcharges.
This is the kind of coordination that benefits from a coordinated plan, not a series of one-off decisions.
FAQs
Yes, completely. Bunching deductions is a recognized, IRS-compliant tax planning strategy. You are not creating deductions that do not exist. You are simply choosing when to make certain legitimate expenditures, like charitable contributions, so they fall in the same tax year and produce the most benefit. Nearly 10% of financial advisors identify bunching deductions as a top year-end tax strategy.
Retirees who benefit most are those whose deductible expenses fluctuate year to year and hover near the standard deduction threshold. Charitable bunching may work well if your deductible expenses tend to be just over or just under the standard deduction each year, or if you expect to have a lower income in the future. If your deductions are either far above the standard deduction every year, or far below it, the strategy adds less value. The sweet spot is when you are close enough that concentrating expenses in one year can push you over.
Yes, and this is one of the most practical tools available for doing it. You contribute a larger-than-usual amount to a DAF in a high-deduction year, take the full deduction upfront, and then distribute grants to your chosen charities over time on whatever schedule you want. Bunching does not mean you have to stop supporting your favorite charities annually. You can maintain giving consistency with a donor-advised fund, contributing in the year that helps your taxes most and granting to charities over time.
One important limitation: the IRS does not permit QCDs to go to donor-advised funds, private foundations, or supporting organizations. If you want to use QCDs from your IRA, those must go directly to qualifying charities. DAFs and QCDs are separate tools used for different purposes, though they can both be part of a thoughtful giving strategy.
It can, depending on how the strategy is executed. Medicare's IRMAA surcharge is tied to your modified adjusted gross income from two years prior. Bunching charitable deductions typically reduces your taxable income, which is a positive for Medicare premium management. However, if bunching coincides with other income events like large IRA withdrawals, Roth conversions, or capital gains, the net effect on your MAGI could go the wrong direction. Common surprises include one-time events like a big Roth conversion, selling stock, or a severance package that can spike MAGI and trigger IRMAA for a full year two years later. Good planning accounts for this.
In some situations, yes. If you take a larger IRA withdrawal in a year when you also have bunched itemized deductions, those deductions can help offset the added taxable income from the withdrawal. This is especially relevant for retirees facing large one-time withdrawals or Roth conversions. The deductions do not eliminate the income, but they can reduce the net taxable amount in that year. This is another reason why bunching works best as part of a coordinated withdrawal strategy rather than as a stand-alone move.
Most people approach this on a two-year or three-year cycle. You concentrate deductions in one year, itemize, then take the standard deduction for one or two years while deductions "reset," and then bunch again. With a two-year bunching strategy, you would itemize deductions on one year's return and take the standard deduction the following year, potentially producing a larger two-year deduction than would be possible by claiming two years of standard deductions. The right cadence depends on your charitable intentions, income pattern, and the size of your deductible expenses.
Documentation matters whenever you itemize. For charitable contributions, keep written acknowledgment from the charity for any gift of $250 or more. For non-cash gifts, the requirements are more detailed depending on the value. For medical expenses, keep receipts, insurance statements, and records of what was paid and when. For property taxes and mortgage interest, your statements from the lender and county will typically cover what you need. Holding these records for at least three years after filing is a reasonable standard practice.
Working with a CPA or a team that coordinates between tax and financial planning makes bunching significantly more effective. The reason is that bunching intersects with several moving parts at once, including your withdrawal plan, Roth conversion strategy, RMD obligations, Social Security taxation, and Medicare premiums. Each of those pieces affects the others. A tax professional who can see the whole picture can help you find the years when bunching produces the most benefit without accidentally creating new problems.
Build a Smarter Deduction Plan
Bunching works best when it fits into a bigger picture, including withdrawals, Roth conversions, and Medicare thresholds.
If you want help mapping out when to itemize, when to take the standard deduction, and how to line it up with your income, schedule a complimentary consultation with a CFP® professional at Bauman Wealth Advisors. We will help you turn these moving pieces into a simple, year-by-year tax plan.
