Add donation bunching calculator for multi-year tax optimization #46
Description
Problem
Many taxpayers could benefit from "bunching" their charitable donations - concentrating multiple years' worth of donations into a single year to exceed the standard deduction threshold and itemize. However, it's difficult to understand the tax impact without comparing scenarios.
Proposed Feature
Add a bunching calculator that helps users understand the tax savings from different donation strategies across multiple years.
User Inputs
- Current year income
- Expected income growth rate (or explicit next year income)
- Total donations they plan to make over 2 years
- Other itemized deductions (mortgage interest, SALT, etc.)
Scenarios to Compare
- Split evenly: Donate half each year
- Bunch in current year: Make all donations this year
- Bunch in next year: Make all donations next year
- Optimal split: Calculate the mathematically optimal allocation
Output
- Total tax savings for each scenario (sum of both years)
- Comparison showing which strategy saves most
- Visualization showing how each scenario affects itemized vs. standard deduction in each year
- Marginal benefit of bunching (extra savings vs. splitting evenly)
Why This Matters
The standard deduction for 2025 is $15,000 (single) / $30,000 (married). If someone has $8,000 in non-charitable itemized deductions and plans to donate $10,000/year:
- Split: $18,000 itemized each year → likely takes standard deduction both years (no benefit from donations)
- Bunch: $28,000 itemized in one year → itemizes that year, standard deduction the other → significant tax savings
Implementation Notes
- Could be a new "Bunching" mode alongside existing "Specific amount" and "Target reduction" modes
- Requires running calculations for 2 consecutive years
- Should account for standard deduction inflation between years
- Consider adding a simple explanation of how bunching works for users unfamiliar with the concept
Related
- Current year selection feature (Change taxes to net taxes less benefits #32) provides foundation for multi-year calculations