Tax question involving tithes.

[SemperFiDawg]

Maybe a little off topic but I figured it would be a good place to start. Here it is.
How much do charitable contributions decrease your taxable income? Is it dollar for dollar or a percentage. Say a person has a taxable income prior to a itemizing their tithing contribution of 50,000 and he tithes 10,000. Will this decrease his taxable income by 10,000 down to 40,000 or will it be a percent (say 30% of his 10,000 contribution) which is 3000 decreasing his taxable income from 50,000 to 47,OOO. Anyone????

 

[Spotlite]

Maybe a little off topic but I figured it would be a good place to start. Here it is.
How much do charitable contributions decrease your taxable income? Is it dollar for dollar or a percentage. Say a person has a taxable income prior to a itemizing their tithing contribution of 50,000 and he tithes 10,000. Will this decrease his taxable income by 10,000 down to 40,000 or will it be a percent (say 30% of his 10,000 contribution) which is 3000 decreasing his taxable income from 50,000 to 47,OOO. Anyone????

Unless you have more items to deduct than your standard deduction you can’t deduct anyways.

Your total deductions would have to exceed the following for your filing status.

$25,900 for joint filers, $19,400 for heads of household, and $12,950 for single filers and those married filing separately.

But, to answer your question - it’s dollar per dollar on your deductions. You’re decreasing your taxable income.

 

[tell sackett]

Any competent tax preparer should be able to help you. If all else fails, pm the 3 iii’d elf.

 

[SemperFiDawg]

Unless you have more items to deduct than your standard deduction you can’t deduct anyways.

Your total deductions would have to exceed the following for your filing status.

$25,900 for joint filers, $19,400 for heads of household, and $12,950 for single filers and those married filing separately.

But, to answer your question - it’s dollar per dollar on your deductions. You’re decreasing your taxable income.

That’s what I had thought but had received conflicting answers.

 

[SemperFiDawg]

Any competent tax preparer should be able to help you. If all else fails, pm the 3 iii’d elf.

My guy is great but he’s geared toward me saving my money (which I get), not so much toward giving it away, but that’s what I pay him for. And I don’t want to insinuate he’s given me bad advice. He hasn’t and wouldn’t. Just looking into it on my own before I run it bye him.

 

[Spotlite]

That’s what I had thought but had received conflicting answers.

I’ve filed this way forever. It’s getting tougher to have enough to deduct. House will be paid off soon so the interest paid there is minimum. Property taxes still keep me in there to have more itemized deductions than the standard deduction.

 

[Danny Leigh]

My guy is great but he’s geared toward me saving my money (which I get), not so much toward giving it away, but that’s what I pay him for. And I don’t want to insinuate he’s given me bad advice. He hasn’t and wouldn’t. Just looking into it on my own before I run it bye him.

What Spotlite said.

Assuming you had more deductions than the standard deduction, then the contribution would reduce your taxable income. The only time you are reducing your tax dollar for dollar is by a tax credit. Tax deductions reduce your taxes by whatever tax bracket you are in.

 

[Spotlite]

My guy is great but he’s geared toward me saving my money (which I get), not so much toward giving it away, but that’s what I pay him for. And I don’t want to insinuate he’s given me bad advice. He hasn’t and wouldn’t. Just looking into it on my own before I run it bye him.

The bracket you need to watch is your taxable income.

Example - $100 can make the difference in the paying 12% or 22% taxes. You want to get that taxable income in the lowest bracket you can, especially if you’re close.,

It’s dollar to dollar in deducting your taxable income, then your liability is percentage based on the bracket you land in for taxable income.

 

[SemperFiDawg]

The bracket you need to watch is your taxable income.

Example - $100 can make the difference in the paying 12% or 22% taxes. You want to get that taxable income in the lowest bracket you can, especially if you’re close.,

It’s dollar to dollar in deducting your taxable income, then your liability is percentage based on the bracket you land in for taxable income.

That’s what I’m trying to do: drop down in tax bracket through charitible contributions. If I lose some money due to depriving the Fed that’s fine by me. I would rather lose money and donate it to charity than give tha Gov one penny.

 

[Spotlite]

That’s what I’m trying to do: drop down in tax bracket through charitible contributions. If I lose some money due to depriving the Fed that’s fine by me. I would rather lose money and donate it to charity than give tha Gov one penny.

I hear ya.,

Last year I had I decided to pay for our youth group to go to Noah’s Ark so I can hit the 12% bracket. It was either do that or pay it to Uncle Sam.

If you can’t keep it in your pockets, keep it in local charity instead of uncle Sam’s is my opinion.

 

[SemperFiDawg]

The bracket you need to watch is your taxable income.

Example - $100 can make the difference in the paying 12% or 22% taxes. You want to get that taxable income in the lowest bracket you can, especially if you’re close.,

It’s dollar to dollar in deducting your taxable income, then your liability is percentage based on the bracket you land in for taxable income.

So if I donate enough to drop me into a lower bracket through monthly giving the IRS is still gonna keep taxing me at my income bracket they are currently taxing at, but I will realize the lower tax bracket when I square up with them at the end of every year when I file and claim the deductions right????

 

[SemperFiDawg]

I hear ya.,

Last year I had I decided to pay for our youth group to go to Noah’s Ark so I can hit the 12% bracket. It was either do that or pay it to Uncle Sam.

If you can’t keep it in your pockets, keep it in local charity instead of uncle Sam’s is my opinion.

EXACTLY!!!

 

[Semi-Pro]

I did an online tax calculator and it was not dollar for dollar. I ended up owing say $800. I upped the charitable giving to $500 and it only dropped what I owed $100 bucks.

 

[Spotlite]

So if I donate enough to drop me into a lower bracket through monthly giving the IRS is still gonna keep taxing me at my income bracket they are currently taxing at, but I will realize the lower tax bracket when I square up with them at the end of every year when I file and claim the deductions right????

Your withholdings throughout the year doesn’t change unless you change it.

When you square up you could lowered your tax liability bracket.

See the attached link

2022-2023 Tax Brackets and Federal Income Tax Rates | Bankrate

Taxes can be made simple. Bankrate will answer all of your questions on your filing status, taxable income and 2022 tax bracket information.

www.bankrate.com

As an example $84, 000 taxed at 22% verses $83,000 at 12%

 

[Spotlite]

I did an online tax calculator and it was not dollar for dollar. I ended up owing say $800. I upped the charitable giving to $500 and it only dropped what I owed $100 bucks.

The only thing that lowers dollar per dollar is what your taxable income would be. Once you’re in a taxable income bracket you pay 10%, 12%, 22%, etc.

You’re not going to get $3500 off from what you owe, it just drops your taxable income $3500. If the drop gets it out of a 22% bracket into a 12% you could see a substantial difference in your liability.

As an example if your taxable income is $10,000 at 10% you pay $1000. If you make a $500 charity donation you lower your taxable income to $9500 at 10%. Now you owe $950.

What the OP is wanting to do is to take his taxable income out of a 22% bracket into a 12% bracket. That’s where you can see a substantial difference.

 

[SemperFiDawg]

The only thing that lowers dollar per dollar is what your taxable income would be. Once you’re in a taxable income bracket you pay 10%, 12%, 22%, etc.

You’re not going to get $3500 off from what you owe, it just drops your taxable income $3500. If the drop gets it out of a 22% bracket into a 12% you could see a substantial difference in your liability.

As an example if your taxable income is $10,000 at 10% you pay $1000. If you make a $500 charity donation you lower your taxable income to $9500 at 10%. Now you owe $950.

What the OP is wanting to do is to take his taxable income out of a 22% bracket into a 12% bracket. That’s where you can see a substantial difference.

Based on what I tithe now I can increase my tithe by 25% of what I'm already giving and it will have the effect of taking a whopping 50% of what the IRS is taking from me allowing me to turn around and give that 50% the IRS was getting to my Church. That's huge. The money is gone either way. If I don't do it, the IRS is gonna wind up with it. It's a win/win. My Church gets more and the IRS gets less.

I would encourage anyone to look into this. It's very, very possible that by picking a charity and donating to it you can do the same: take from the IRS and support your charity. Who doesn't want to LEGALLY pay less to the IRS? Like I said, the money is gonna be gone either way.

 

[SemperFiDawg]

I did an online tax calculator and it was not dollar for dollar. I ended up owing say $800. I upped the charitable giving to $500 and it only dropped what I owed $100 bucks.

You've got to give enough to drop into a lower tax bracket, or possibly 2, depending on what you make. That's the key. The money is gonna be gone either way. At least by giving you are able to direct it away from the IRS ( and whatever leftist agenda they want to fund) into something you care about.

 

[Semi-Pro]

The only thing that lowers dollar per dollar is what your taxable income would be. Once you’re in a taxable income bracket you pay 10%, 12%, 22%, etc.

You’re not going to get $3500 off from what you owe, it just drops your taxable income $3500. If the drop gets it out of a 22% bracket into a 12% you could see a substantial difference in your liability.

As an example if your taxable income is $10,000 at 10% you pay $1000. If you make a $500 charity donation you lower your taxable income to $9500 at 10%. Now you owe $950.

What the OP is wanting to do is to take his taxable income out of a 22% bracket into a 12% bracket. That’s where you can see a substantial difference.

That's basically what I had to do this year. I upped my 401k deductions to lower my gross taxable wages. Or at least that's what I think I did it for. I understand what y'all are saying now.

 

[ryanh487]

Dollar for dollar. My tithe raises my deduction enough to nearly twice the standard deduction combined with my home owner's deductions and Roth IRA contributions. If i was married the standard deduction would be awful close to it though.

 

[Israel]

Lord?