"The law did not eliminate the charitable deduction in name. It rendered it functionally useless for anyone who does not already have enough deductions to clear the standard deduction threshold on their own."
"Instead of giving $5,000 per year across five years, you deposit a large lump sum into a DAF in a single year. That single contribution is large enough to push you over the itemization threshold."
The 2025 Tax Law raised the standard deduction, causing most American households to no longer benefit from itemizing deductions. Charitable contributions are only deductible if itemized, which is unlikely for families whose total deductions do not exceed the standard deduction threshold. This change has rendered charitable deductions functionally useless for many givers. A solution called 'bunching' allows donors to contribute a lump sum to a donor-advised fund, enabling them to exceed the threshold and regain tax benefits for their charitable giving.
Read at 24/7 Wall St.
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