The holidays are coming up, and it’s time for the annual ritual in high-net-worth households: getting out the checkbook and sending donations to favored not-for-profit institutions and causes. Fifty-five to 60 percent of charitable giving occurs in the fourth quarter, with 44 percent in December alone, says Sarah Libbey, president of Fidelity Charitable Gift Fund. This year is different, though; it’s the last year of the tax cuts enacted under former President Bush, and higher marginal rates will go into effect Jan. 1. So some affluent investors are wondering, “Do I skip writing the check this year and make the donation in 2011, when I might need a deduction more?”

Some advisors and tax experts generally agree it’s better to write the check this year. It’s unclear whether or when Congress will revisit an extension of the Bush cuts, or what form such an extension might take. Tax rules that reduced the value of all itemized deductions for certain large bracket taxpayers —rules that were phased out recently—are scheduled to be reinstated in 2011. And some advisors say it’s unwise to make financial decisions based on guesses of what may or may not happen with tax rules. Mary Deatherage, a Morgan Stanley Smith Barney advisor in Little Falls, N.J. who serves HNW clients, likens it to playing roulette. “You can’t let the tax tail wag the dog. You can’t make every decision based on what the tax implications of the decision are,” she says. “Sometimes you have to step back and say, ‘What’s my intent? How do I best serve my intent?’ We certainly consider taxes as a factor in the decision, but we don’t think of taxes as the be-all and end-all.”

The current top tax bracket of 35 percent would bump up to 39.6 percent effective at the start of the new year. Republicans in Washington, who gained a majority in the House of Representatives in the Nov. 2 election, have been pushing for the Bush cuts to be made permanent across all income levels, while President Obama has opposed extensions for families earning more than $250,000 (a proposal by Obama last year that would limit charitable deductions from those with incomes greater than $250,000 to 28 percent of each dollar donated fell by the wayside after partisan criticism.) Timothy Steffen, financial and estate planning manager for Baird Private Wealth Management group, is skeptical Congress will act before the end of this year. “The Republicans are saying, ‘Why should we meet you halfway when in a couple of weeks or months we’re going to have a lot more of our folks here? We’ll have more leverage to get something even bigger that we want.’ ” He expects a deal to be reached next year retroactive to Jan. 1, with rates “probably pretty similar” to what exists now. Nevertheless, he recommends taking charitable deductions this year if income is consistent from year to year and there’s no tax benefit to deferring.

Mitch Drossman, head of national wealth strategies for US Trust, says he’s not certain that higher tax rates are in the offing for 2011. “The momentum seems to be shifting, and shifting very fast, in the other direction, and that is to keep the tax rates that we have now and extend them for a year or two.” Drossman says advisors and clients need to prepare for what rates actually will be, and not what they think they will be. A charitable deduction may not be worth more next year even with higher rates, he adds.

For example, a former section of tax law reduced all itemized deductions by 3 percent of the amount by which adjusted gross income exceeds certain levels. That section of law was phased out, but it’s scheduled to resume in 2011. “What’s the likelihood that we’ll even see higher rates next year? I think that’s been diminishing rather quickly,” Drossman says. “From the discussions that I have had, (clients) are erring on the side of making gifts this year.”

Those clients are not alone. In a Fidelity survey in September of 600 adults who planned to donate $200 or more this year, 88 percent said they wouldn’t change their giving behaviors based on tax increases. “People do tax planning around their charitable giving because they want to stretch the dollars as far as they can. But it isn’t the reason they give,” says Kim Wright-Violich, president of Schwab Charitable. “They’ve probably already made commitments to charities for 2010. So they’re going to feel obligated to the charities they’ve committed to.” Gillian Howell, national private philanthropy executive for Bank of America Merrill Lynch, says she hasn’t seen a downturn in giving this quarter. “They’re really changing their approach as opposed to cutting back to what they’re giving,” she says; for example, some are collaborating more with other philanthropists on donations for targeted projects.