Most taxpayers are eager to claim any and all tax deductions that they can, yet the reality is that with the newly expanded Standard Deduction under the Tax Cuts and Jobs Act (TCJA) of 2017, as many as 90% of households will no longer itemized deductions at all… which effectively means many tax deductions that were recently popular, from state and local income and property taxes, to mortgage interest, and even charitable contributions, may actually be worthless in the future.
For those who are at least close to the threshold where itemized deductions exceed the Standard Deduction, though, it may be appealing to deliberately time and “lump together” available itemized deductions (e.g., shifting the timing of state estimated tax payments, and property taxes where permitted), or even clump charitable contributions into a donor-advised fund, such that the combined lumped-and-clumped deductions do exceed the Standard Deduction… at least every few years.
Ironically, those who already have substantial itemized tax deductions – especially including the mortgage interest deduction – may already have more than enough deductions to pursue such strategies. And with the new $10,000 cap on SALT (State And Local Tax) deductions, many households will struggle to itemize at all (especially married couples). Nonetheless, for some, the opportunity to lump and clump deductions together – especially for those that have other (appreciated) assets available to front-load charitable contributions into a donor-advised fund (and save on capital gains taxes in the process – can produce a material tax savings in the future!
source https://www.kitces.com/blog/deduction-lumping-charitable-clumping-tax-savings-itemized-vs-standard-deduction/?utm_source=rss&utm_medium=rss&utm_campaign=deduction-lumping-charitable-clumping-tax-savings-itemized-vs-standard-deduction
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