Why donate to charity?

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tbradnc
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Why donate to charity?

Post by tbradnc »

I have a question .....

From a strictly monetary standpoint how does donating to charity save money at tax time?

Say I"m in the 33% tax bracket. If I donate a dollar, I save $0.33 on my taxes and a charity gets the $0.33. If I keep my dollar the IRS gets the $0.33.

In both scenarios I am left with the same amount of money. Is donating to charity to save on taxes just a way of steering money to charity instead of the IRS? That's noble, and a great reason - but from a strictly bean-counter point of view it looks like a wash.

What am I missing?
livesoft
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Re: Why donate to charity?

Post by livesoft »

I have directly benefitted from non-profits. I used to work for one. I received grants from several. Have you ever benefitted from a charity yourself?
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

Oh, don't misunderstand me - I contribute to several charities and also volunteer.

My question was purely financial. I was/am wondering if donating to charity actually saves you money or just keeps the exact amount you donated from the IRS - leaving the donor with the same amount of money in both cases.
livesoft
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Re: Why donate to charity?

Post by livesoft »

It may save you money if the deduction shifts your taxable income to a lower bracket.

It may save you money if you are using the bunching technique for deductons: itemized one year, standard deduction the next, itemized, standard, itemized, standard, ….

It may get you out of AMT.
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House Blend
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Re: Why donate to charity?

Post by House Blend »

tbradnc wrote:What am I missing?
What you are missing is that some people spend money on charity no matter what. For them, it makes sense to find the most tax-efficient way to spend that money.

More to the point, if you think tax deductions are the key to understanding why people make charitable donations, you must be having a really hard time to understand the motivations of the millions of people who donate to charity and do not/cannot itemize deductions.
Last edited by House Blend on Wed Dec 31, 2014 10:27 am, edited 1 time in total.
LRonHalfelven
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Re: Why donate to charity?

Post by LRonHalfelven »

I don't understand your math. Relative to the scenario where you don't donate anything, these are the amounts everyone ends up with:

You: -$0.67
IRS: -$0.33
Charity: +$1.00
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midareff
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Re: Why donate to charity?

Post by midareff »

To help those that can't help themselves. I donate mostly to help children.... UNICEF, Operation Smile, Fred Hollows and added this year the Wounded Warrior project. I have been fortunate and want to do something to help those who have not been as fortunate. I feel good about it and am quite happy some of the donation comes from tax dollars.
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

Gotcha, thanks.

To personalize it a bit.. we're going to be in the 10% bracket this year but owe.

So, say we're going to owe $1000. I can donate $10,000 and owe $0 in tax. Or I can just pay the $1000 tax and have $9000 more dollars in my pocket. I guess this is why charitable giving strategies aren't marketed to poor people. :)

There's just something here I can't make click in my brain.
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TheTimeLord
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Re: Why donate to charity?

Post by TheTimeLord »

tbradnc wrote:I have a question .....

From a strictly monetary standpoint how does donating to charity save money at tax time?

Say I"m in the 33% tax bracket. If I donate a dollar, I save $0.33 on my taxes and a charity gets the $0.33. If I keep my dollar the IRS gets the $0.33.

In both scenarios I am left with the same amount of money. Is donating to charity to save on taxes just a way of steering money to charity instead of the IRS? That's noble, and a great reason - but from a strictly bean-counter point of view it looks like a wash.

What am I missing?
It is the same with all tax deduction like the mortgage interest deduction. You give someone a dollar and the government gives you back something in this case 33 cents by reducing your taxes. It just reduces the cost of activities the tax code has deemed worthy. This of course assumes you have enough deduction to itemize and doesn't go into how some of this is offset by the loss of the standard deduction.
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an_asker
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Re: Why donate to charity?

Post by an_asker »

LRonHalfelven wrote:I don't understand your math. Relative to the scenario where you don't donate anything, these are the amounts everyone ends up with:

You: -$0.67
IRS: -$0.33
Charity: +$1.00
I agree.

OP:

Just to clarify - here are the two scenarios for your marginal dollar earned at 33% tax rate. Here is how that marginal dollar would be distributed:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00
MarginalCost
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Re: Why donate to charity?

Post by MarginalCost »

In normal circumstances, a cash donation to charity should never increase your actual income, however, I can think of two exceptions.

One is if you need to lower your taxable income to qualify for some tax credit or benefit. This usually won't matter though, as charitable contributions affect taxable income, but not AGI.

Second, you can usually donate appreciated securities at a stepped-up basis without incurring capital gains tax. If you buy a stock for $1, and sell it for $21, you get a $21 deduction in taxable income. To use your example of the 33% tax bracket, that reduces your tax burden by $6.93. If you had sold it, you would pay 15% on $20 in capital gains, or $3. So you're still better off selling the stock, but depending on your perspective, you could say you come out ahead relative to the $1 you paid for it.

Donate to charity to give back and fight your own selfishness. Don't do it for the tax deduction.
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

an_asker wrote:
LRonHalfelven wrote:I don't understand your math. Relative to the scenario where you don't donate anything, these are the amounts everyone ends up with:

You: -$0.67
IRS: -$0.33
Charity: +$1.00
I agree.

OP:

Just to clarify - here are the two scenarios for your marginal dollar earned at 33% tax rate. Here is how that marginal dollar would be distributed:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00
Thanks... this is it! I butchered the math in my OP for sure.... My point was that I didn't see how you can save money by spending (donating) money - more or less. :)

Agree about giving for givings sake and not for the deduction. That's how I give. I was just trying to understand something.
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cheese_breath
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Re: Why donate to charity?

Post by cheese_breath »

Short answer. You don't donate to save money (because you won't). You donate to give money.
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

cheese_breath wrote:Short answer. You don't donate to save money (because you won't). You donate to give money.
This from an above post explained it:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00


If you just want to have more money, don't donate. If you want to give a $1 to a charity at a discount to yourself, donate.
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tadamsmar
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Re: Why donate to charity?

Post by tadamsmar »

Here's how to make money for the 33% tax bracket

1. Buy or get stuff cheap or free (from yard sales for instance).

2. Donate it to Goodwill and get a receipt.

3. Take a tax deduction for more than 3 times the purchase price.
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cheese_breath
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Re: Why donate to charity?

Post by cheese_breath »

MarginalCost wrote:In normal circumstances, a cash donation to charity should never increase your actual income, however, I can think of two exceptions.

One is if you need to lower your taxable income to qualify for some tax credit or benefit. This usually won't matter though, as charitable contributions affect taxable income, but not AGI.
Unless the donation is through a QCD.
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

I feel like a dunce for asking the question but I'm glad I did - it makes sense now.

Thanks for helping me understand.
Northster
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Re: Why donate to charity?

Post by Northster »

" I guess this is why charitable giving strategies aren't marketed to poor people."

As others have pointed out there are reasons to give other than 'strategies'. Most comparisons I have seen show the less well off give proportionally more than those with more. And the charities clearly gain -- they are in there fighting to keep the deduction when 'tax reform' begins to touch on reducing deductions.
surfstar
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Re: Why donate to charity?

Post by surfstar »

Tax breaks for charitable donations are simply the government subsidizing charitable organizations. Just not directly. It allows the donator to feel better about themselves and direct to what charity they prefer vs the government simply giving directly to charities.
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midareff
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Re: Why donate to charity?

Post by midareff »

tbradnc wrote:Gotcha, thanks.

To personalize it a bit.. we're going to be in the 10% bracket this year but owe.

So, say we're going to owe $1000. I can donate $10,000 and owe $0 in tax. Or I can just pay the $1000 tax and have $9000 more dollars in my pocket. I guess this is why charitable giving strategies aren't marketed to poor people. :)

There's just something here I can't make click in my brain.
I understand and spent many years of my life dirt poor. While paying alimony and child support it took me 5 months to save nickels, dimes and pennies (there were no spare quarters) so I could take myself out one night for a drink. Two $4 Scotches and a $2 tip and totally broke again. I swore to myself those days would eventually be gone forever and they are. I get it (your situation) but you are looking at giving for the wrong reasons. If you can look at the little kids with cleft palates, dirt floor poverty, correctable blindness and our wounded warriors and don't feel a desire to help because you need the money that's OK.
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3CT_Paddler
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Re: Why donate to charity?

Post by 3CT_Paddler »

Outside of some rare exceptions, you will not see a net benefit to your bottom line by donating to charity.

Bogle has a very apt Einstein quote in his book Enough, Not Everything That Counts Can Be Counted!
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

3CT_Paddler wrote:Outside of some rare exceptions, you will not see a net benefit to your bottom line by donating to charity.
This is what I was wondering and has been answered. I wasn't trying to be a Scrooge or give a reason not to donate to charity.

So:

1. If you want to have more money in your pocket and that's all you care about - don't donate.

2. If you want to donate and can itemize deductions you can get a discount in the amount of your tax bracket for every dollar you donate.
Xyz214
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Re: Why donate to charity?

Post by Xyz214 »

tbradnc wrote:
cheese_breath wrote:Short answer. You don't donate to save money (because you won't). You donate to give money.
This from an above post explained it:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00


If you just want to have more money, don't donate. If you want to give a $1 to a charity at a discount to yourself, donate.
I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
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shum
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Re: Why donate to charity?

Post by shum »

You might check out a Charitable Gift Annuity if you are retired or close to retirement, especially if you got a windfall yourself. You can build yourself a floor for retirement and give a substantial amount to a charity (colleges are often the recipient). You get a tax deduction and quite a large perpetual monthly payment mostly tax free. Of course, in every case, you are giving away money. Compared to giving the managing and early death benefits to an insurance company, it seems better to give them to an non-profit you think will outlive you. Colleges offer a variety of methods to generate a somewhat win/win arrangement.
-shum
katnok
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Re: Why donate to charity?

Post by katnok »

Xyz214 wrote:
tbradnc wrote:
cheese_breath wrote:Short answer. You don't donate to save money (because you won't). You donate to give money.
This from an above post explained it:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00


If you just want to have more money, don't donate. If you want to give a $1 to a charity at a discount to yourself, donate.
I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
+1. This is correct. Its as if you never earned that dollar.
Johno
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Re: Why donate to charity?

Post by Johno »

Xyz214 wrote: I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
Was going to say, you can't make money by giving it away.

Gifting of appreciated shares can come close to being an exception to this if you look at it a certain way. For example, I have some ETF shares I donate which are worth around 5 times what I paid for them. So per $1000 of donation I get ~$300 reduction in taxes now, but only paid $200 for the shares originally. However of course I took for many years the risk of the shares going down instead of up, and am also neglecting inflation. And I still receive less money by giving the shares away, $300, then if I sell them and keep the net proceeds, ~$800 after tax (80% of the amount taxable at slightly lower rate than the deduction for donating).
Last edited by Johno on Wed Dec 31, 2014 12:36 pm, edited 1 time in total.
Dude2
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Re: Why donate to charity?

Post by Dude2 »

livesoft wrote:It may get you out of AMT.
Thank you, livesoft, that is helpful. I remember trying everything I could one year and could not seem to do it, but after reading the following article I am reminded of the complexities of the subject.

http://www.fidelitycharitable.org/givin ... yths.shtml
Xyz214
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Re: Why donate to charity?

Post by Xyz214 »

Johno wrote:
Xyz214 wrote: I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
Was going to say, you can't make money by giving it away.

Gifting of appreciated shares can come close to be an exception to this. For example, I have some ETF shares I donate which are worth around 5 times what I paid for them. So per $1000 of donation I get ~$300 reduction in taxes now, but only paid $200 for the shares originally. However of course I took for many years the risk of the shares going down instead of up, and am also neglecting inflation. And I still receive less money by giving the shares away, $300, then if I'd sold them and kept the net proceeds ~$700 after tax.
+1

tbradnc, you can check out http://www.bogleheads.org/wiki/Donating ... securities
The benefit of this type of donation is equal to the value of the tax deduction. If you donate $10,000 worth of a mutual fund and you paid $5,000 for the shares, you avoid a $5,000 long-term gain, saving $750 at the 15% tax rate. The charity, since it is tax-exempt, can sell the shares itself and pay no tax.
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cheese_breath
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Re: Why donate to charity?

Post by cheese_breath »

I suspect the tax deduction does present an emotional factor in some people deciding to donate, similar to the rebate on a software product. You might not be desperate for the product, but rebate come-on and thrill of finding that rebate check in the mail make it seem a deal too good to pass up. The idea of donating a dollar for only $0.67 and the thrill of the extra $0.33 tax refund makes one forget the dollar it cost to get that $0.33.
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inbox788
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Re: Why donate to charity?

Post by inbox788 »

Xyz214 wrote:
tbradnc wrote:
cheese_breath wrote:Short answer. You don't donate to save money (because you won't). You donate to give money.
This from an above post explained it:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00


If you just want to have more money, don't donate. If you want to give a $1 to a charity at a discount to yourself, donate.
I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
[We're talking about $1 income at marginal rate pre-tax]

No, scenario 2 is correct. It's a zero sum game, so You + IRS + Charity = $1, so when you check the math, it's just a shuffling of that dollar between the three players. If You = -.67, the $1 disappears!

One way to think of this deduction is that the government is matching your donation, so your $1 donation is really a $0.33 donation with a government 2:1 match. If your employer matches 1:1, that's a 5:1 match on your donations! You leverage the power to effect change. Another way to think about it is that the government is an involuntary charity. Some people also benefit from the government (jobs, services, etc.), but this matching give you additional say in how these benefits impact others. You can have the government provide services or choose to voluntarily add funds to a charity that provides services that may offset some government costs. It's really a win/win for the government. People vote with they cash for charity programs that they believe in, and the government saves costs in providing these services. If all the charity social services shut down, the government would need to step in and raise costs of providing these services or there would be much greater suffering (think Red Cross disaster relief, food banks, Catholic charities helping poor, etc.).
b4real
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Re: Why donate to charity?

Post by b4real »

Nicely timed topic for our situation.
Retired early 2014 but continued salary until last check this month. So, we will go from a high tax bracket this year to 15% in 2015.

In looking at taxcaster last week I realized a large (for us) charitable gift this year would never have as big a “bang for the buck” again. After a short conversation with DW we met with a University representative and endowed a scholarship fund. We are blessed that we could do this and not jeopardize our retirement.

Making this donation now instead of waiting until we are gone has the following benefits for us:
1) The satisfaction of helping several students each year studying what we are interested in supporting, hopefully perpetually if the funds are managed prudently.
2) Receiving letters of thanks from the recipients each year for the rest of our lives. How cool is that?
3) A large reduction (according to taxcaster) in 2014 income tax including erasing AMT thereby reducing the actual out of pocket cost of the donation.

The joy we will get over the years watching this gift unfold is well worth the cost. I do not feel bad about the tax break, it is simply the way the system works.
an_asker
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Re: Why donate to charity?

Post by an_asker »

Xyz214 wrote:
tbradnc wrote:
cheese_breath wrote:Short answer. You don't donate to save money (because you won't). You donate to give money.
This from an above post explained it:

Scenario 1: You do not donate to any charity.

You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.

You: +$0.33
IRS: -$0.33
Charity: +$1.00


If you just want to have more money, don't donate. If you want to give a $1 to a charity at a discount to yourself, donate.
I don't think scenario 2 is correct. It should be

You: -$0.67
IRS: -$0.33
Charity: +$1.00
If that is the way you want to spin it, scenario 1 would need to be re-written thus:

You: -$0.33
IRS: +$0.33
Charity: $0

My original two scenarios were illustrating what happened to that extra dollar that you earned in the 33% marginal tax bracket and I stand by that comparison.
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cheese_breath
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Re: Why donate to charity?

Post by cheese_breath »

inbox788 wrote: ...One way to think of this deduction is that the government is matching your donation, so your $1 donation is really a $0.33 donation with a government 2:1 match. If your employer matches 1:1, that's a 5:1 match on your donations!...
Well all this boggles my simple mind. :confused But isn't your $1 donation really a $0.67 donation with a 1/2 government match? And then your employer throws in another $1, and the charity ends up with $2 which cost you $0.67. Isn't that a 2:1 match?
Last edited by cheese_breath on Wed Dec 31, 2014 2:32 pm, edited 1 time in total.
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FrogPrince
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Re: Why donate to charity?

Post by FrogPrince »

Having set up a nonprofit, the point of the tax break in the code is that money that would have otherwise gone to the IRS is redirected to the charity of your choosing. It was never meant to lower your taxes, though there could be such an effect if it kicks you into a lower marginal bracket. So technically, it's the government giving up its claim on your money in favor of a charity you designate.

So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
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cheese_breath
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Re: Why donate to charity?

Post by cheese_breath »

FrogPrince wrote: ... So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
Brilliant. :thumbsup
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ftobin
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Re: Why donate to charity?

Post by ftobin »

FrogPrince wrote:So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
Donating to charity simply reduces your income that the government taxes. This allows you to donate 100% of your pre-tax income, and not owe any income taxes.

You can't "send them the portion that the IRS would otherwise take", since the government always taxes you on the income you don't donate. In other words, if you don't donate your income, the government taxes it. Think of it that way instead of the refund approach.
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

FrogPrince wrote:Having set up a nonprofit, the point of the tax break in the code is that money that would have otherwise gone to the IRS is redirected to the charity of your choosing. It was never meant to lower your taxes, though there could be such an effect if it kicks you into a lower marginal bracket. So technically, it's the government giving up its claim on your money in favor of a charity you designate.

So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
I referred to this earlier in the thread as "steering" money to a charity that would otherwise go to the IRS. I mean, why not?

However, if I sit down and do my taxes and find out I owe $1000 I'm not going to contribute $10,000 to get my taxes to $0.00 (I'll be in the 10% bracket this year).
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FrogPrince
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Re: Why donate to charity?

Post by FrogPrince »

tbradnc wrote:
FrogPrince wrote:Having set up a nonprofit, the point of the tax break in the code is that money that would have otherwise gone to the IRS is redirected to the charity of your choosing. It was never meant to lower your taxes, though there could be such an effect if it kicks you into a lower marginal bracket. So technically, it's the government giving up its claim on your money in favor of a charity you designate.

So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
I referred to this earlier in the thread as "steering" money to a charity that would otherwise go to the IRS. I mean, why not?

However, if I sit down and do my taxes and find out I owe $1000 I'm not going to contribute $10,000 to get my taxes to $0.00 (I'll be in the 10% bracket this year).
Correct - it's not meant to be an incentive for you to be more virtuous.
Johno
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Re: Why donate to charity?

Post by Johno »

cheese_breath wrote:
inbox788 wrote: ...One way to think of this deduction is that the government is matching your donation, so your $1 donation is really a $0.33 donation with a government 2:1 match. If your employer matches 1:1, that's a 5:1 match on your donations!...
Well all this boggles my simple mind. :confused But isn't your $1 donation really a $0.67 donation with a 1/2 government match? And then your employer throws in another $1, and the charity ends up with $2 which cost you $0.67. Isn't that a 2:1 match?
The donation definitely costs you 0.67 not .33. And that doesn't depend on how you 'spin' it but is the obvious simple fact (which I assume is what you are more gently saying).
Whatever the merits of the OP's way of think of this, it's demonstrably not a good way of explaining it if it led somebody else to conclude that a 33% tax break on charitable donations means you're only paying 33% of it. :shock:
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FrogPrince
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Re: Why donate to charity?

Post by FrogPrince »

ftobin wrote:
FrogPrince wrote:So the key question is simply whether you wish to donate to charity. If so, then why not send them the portion that the IRS would otherwise take?
Donating to charity simply reduces your income that the government taxes. This allows you to donate 100% of your pre-tax income, and not owe any income taxes.

You can't "send them the portion that the IRS would otherwise take", since the government always taxes you on the income you don't donate. In other words, if you don't donate your income, the government taxes it. Think of it that way instead of the refund approach.
If you have $1 you wish to donate, hypothetically you could have paid the tax on it - say $0.20 - and then sent the remaining $0.80 to the charity. This $0.20 portion that the IRS would have claimed could instead be redirected to the nonprofit (assuming you itemize and have deductions that exceed the standard deduction). This $0.20 is "the portion the IRS would otherwise take".
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Aptenodytes
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Re: Why donate to charity?

Post by Aptenodytes »

If you have to ask you wouldn't understand. Keep your money.
yosef
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Re: Why donate to charity?

Post by yosef »

Can people read the thread? OP has already explained he donates and volunteers.
livesoft
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Re: Why donate to charity?

Post by livesoft »

Dude2 wrote:
livesoft wrote:It may get you out of AMT.
Thank you, livesoft, that is helpful. I remember trying everything I could one year and could not seem to do it, but after reading the following article I am reminded of the complexities of the subject.

http://www.fidelitycharitable.org/givin ... yths.shtml
Great link! Thanks for posting it.
Wiki This signature message sponsored by sscritic: Learn to fish.
john94549
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Re: Why donate to charity?

Post by john94549 »

Conceptually, donating non-cash items can often be tax-efficient.
basspond
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Re: Why donate to charity?

Post by basspond »

an_asker wrote:Scenario 1: You do not donate to any charity.
You: + $0.67
IRS: + $0.33
Charity: $0

Scenario 2: You donate the buck to charity.
You: +$0.33
IRS: -$0.33
Charity: +$1.00
I think Scenario #2 should be:

You: +$0.33
IRS: $0.00
Charity: +$1.00
(The government doesn't get any of the tax on the $1 if it is a donation. They would hypothetically loose $0.33, but then you would also loose $0.33.)

In the end you increase the value of your $1 to $1.33 buy making a donation.
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jeffyscott
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Re: Why donate to charity?

Post by jeffyscott »

I'm surprised at all the odd (to me) ways people think about this. If I donate a dollar, It means I get $0, the IRS gets $0, and the charity gets $1. If I do not donate then I pay the IRS $0.33 and keep $0.67.

So it's:

donate the $1
Me: $0
IRS: $0
Charity: $1

do not donate the $1
Me: $0.67
IRS: $0.33
Charity: $0

So act of making the donation of $1 could also be looked at as costing me $0.67 and the IRS $0.33
The two greatest enemies of the equity fund investor are expenses and emotions. ― John C. Bogle
BahamaMan
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Re: Why donate to charity?

Post by BahamaMan »

Or here is what the real wealthy do.

Buy a painting for $1 Million.
Get it appraised for $10 Million.
Donate it to a Museum (They put a Gold Plaque below it with your name, showing how generous you are.)
Write off $10 Million on your Taxes next year.
Save at least $3 Million on Taxes and make out like a Bandit (You Are)
The rest of the Tax Payers all get screwed!
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tbradnc
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Re: Why donate to charity?

Post by tbradnc »

jeffyscott wrote: So act of making the donation of $1 could also be looked at as costing me $0.67 and the IRS $0.33
Right - you can donate and get a discount equal to your federal tax bracket if you itemize.

Donating to charity isn't a way to save money - if you want to have the most money in your pocket don't donate and pay the tax.

If you're like most of us tax deductions are not the primary reason for donating anyway. I just wanted to understand the way donating to charity works with taxes.
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Aptenodytes
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Re: Why donate to charity?

Post by Aptenodytes »

yosef wrote:Can people read the thread? OP has already explained he donates and volunteers.
I apologize if my snark was unjustified. In the future it is best to edit the original post if the initial presentation of the situation is markedly different than what was intended or what is relevant to a discussion of it.

That said, it is a bit depressing that it takes so much effort to explain how addition and multiplication work.
spectec
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Re: Why donate to charity?

Post by spectec »

I donate because it is good stewardship of the resources my Creator has entrusted to my care. The tax deduction is a side issue which indirectly enables me to give marginally more than I could otherwise afford to give. I also donate to cerain causes which provide no tax deduction, for the same reasons as originally stated.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers
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