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I'm under the impression that it works like this: I make $100,000 this year, donate $20,000 to charity, pay taxes on $80,000 in income. Is this not accurate? My
by pault 9y ago
I'm under the impression that it works like this: I make $100,000 this year, donate $20,000 to charity, pay taxes on $80,000 in income. Is this not accurate? My understanding is that it can save you money if you're just over the bottom end of a tax bracket. Not sure if that applies to corporations too.
- nradov 9y agoThat's not quite accurate. Charitable donations are (generally) deductible on income tax returns. But tax brackets apply at marginal levels. There is no way to actually "save" money by donating to charity. The only exception is if you donate goods and then cheat by valuing those goods at above the market rate; some charities used to facilitate this by giving out receipts for inflated values but the IRS has been cracking down on that.
- pjc50 9y ago> I make $100,000 this year, donate $20,000 to charity, pay taxes on $80,000 in income. Is this not accurate? That sounds accurate. > it can save you money if you're just over the bottom end of a tax bracket. That sounds like a misunderstanding of tax brackets - if the brackets are (e.g) 20% up to $80k and 40% above that, with no deductions, what do you pay if you earn $80,001?
- pault 9y agoYou're right. Obviously I've never given this subject much thought. :)