Use tax free savings to bunch charitable contributions?

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Use tax free savings to bunch charitable contributions?

Post by investing_enthusiast » Wed Nov 07, 2018 12:53 pm

I’m considering shifting $18,000 to 22,000 of yearly donations, to bunching the donation on a bi-annual basis, per year. I do not wish to save and push donations to the following year. I understand this may result a “lost” deduction of contributing up to the $12,000 threshold the following year. After scouring the Internet for weeks, Bogleheads are perhaps among the only people who may be prepared to answer this!

I have some liquid savings to cover bunching this year, ahead of 2019, but not nearly enough. I am considering withdrawing my HSA to cover out-of-pocket health care costs which exceed my HSA balance. My effective federal + state income tax rate on AGI is 17%. My qualified out-of-pocket medical costs exceed my yearly HSA contributions. I had planned to keep my HSA contributions for tax free growth. But saving 17% on bunched donations should offset that.

Also trying to maintain an AGI below the $194k married limit to fully contribute to Roth IRAs. Bunching donations will result in a fluctuating AGI from year to year, and perhaps a higher tax bracket. My SALT deduction is just below the $10,000k limit.

1-Any idea how I could construct a net present value (NPV) calculation to compare an investment (qualified withdrawal from HSA, all money market funds at present), against anticipated tax savings?
2-Does this strategy sound reasonable?
3-Should I prepay property tax in the “off year” to offset an increased AGI, if it’s under the $10,000k limit.
4-Anything I have not considered?

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