6 ms·
Wait what? Who gets the tax break there?
by mulmen 6y ago
Wait what? Who gets the tax break there?
- khuey 6y agoIt should be a wash either way unless someone falls into some weird edge case where deductions are limited. The corporation is deducting the payment either way, either as comp paid out to employees or as a charitable donation directly.
- dilyevsky 6y agoThat’s probably correct but previously they were also paying your taxes on the gift for you (i know). Since they didn’t share all the details it was hard to figure out if how it played out financially. I didn’t have a dog in that race bc I couldn’t stand android so I wasn’t even claiming my gift previously but it was interesting to watch the political pickle they got themselves in
- mcny 6y agoIf it is a thousand dollar donation, what am I going to do with the tax break? I still have to take a standard deduction. What am I missing?
- dilyevsky 6y agoMajority of goog employees were making high salary in California so very few people in head office were taking standard deduction especially before trumps tax changes
- dlp211 6y agoCharity is an above the line deduction.
- Thorrez 6y agoNo it's not. $300 can be an above-the-line deduction. Any donation beyond that is below the line. https://www.aarp.org/money/taxes/info-2020/how-to-deduct-2020-charity-donations.html https://www.aarp.org/money/taxes/info-2020/how-to-deduct-202...
- astrange 6y agoIt wasn't last year, now it is again, so people might've missed it. I thought you could only deduct $300 though.
- dboreham 6y agoAre you talking about California state tax? The $300 thing doesn't jive with my federal tax spreadsheet..
- Thorrez 6y agoNo, we're talking federally. There's a $300 federal above-the-line charitable deduction. Everything after that is below the line. https://www.aarp.org/money/taxes/info-2020/how-to-deduct-2020-charity-donations.html https://www.aarp.org/money/taxes/info-2020/how-to-deduct-202...
- Thorrez 6y agoYes, it's limited to $300. So it's not very useful for people significantly more than that but still below the standard deduction.
- compiler-guy 6y agoYou didn’t get the deduction. It was just a way to direct company funds.
- dilyevsky 6y agoThey didn’t share the details but most likely the company. The donation was “on behalf of all employees”
- thyrsus 6y agoObliquely relevant question: can U.S. sole proprietors make expensed charitable contributions? I'm guessing not, because that would decrease the 13.5% Social Security "contribution", and would be on top of the "standard deduction" that was increased to make Schedule A itemization preferable only in exceptional cases.
- dboreham 6y agoI don't know anything about sole trader taxation but corporations can make charitable donations that are treated as business expenses (hence not taxed). They pretty much have to be cash, not in-kind contributions though. Ianaa, etc.
- jartelt 6y agoIf I recall correctly, the employees just picked a charity and Google gave the donation. The "gift" was being able to pick the charity. I don't think there was any employee tax break.
- Thorrez 6y agoWell the employee doesn't have to pay income tax or payroll tax on the money, so in that sense there is a tax break compared to if the money was given to the employee.
- Salgat 6y agoNot a tax break for the employee, since the net effect is still less money. Unless you consider losing your job and having no salary to tax also a tax break.
- kgwgk 6y agoIt’s not “still less money” compared with the situation where the employee gets the money AND donates the money. Of course if the employee was not going to keep the money not getting it is a net loss.
- jartelt 6y agoPeople were mainly just annoyed that rather than getting a free phone or some cash as a gift, they instead got the ability to choose a charity to receive a donation from Google (which has "value" but not monetary or physical value to the employee). The expected to receive a phone/cash so it felt like less compensation/bonus when they didn't receive it. I doubt anyone was thinking about donation related tax breaks or anything like that. It was simply "sure I will have Google give $500 to this food bank, but why don't I get a new phone or cash bonus?"
- deleted 6y ago[deleted]
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- Thorrez 6y agoWhen you make a charitable donation of cash, you get a tax deduction to undo the income tax you paid when you originally got that cash. If a company directly donates to charity, you don't pay income tax on that money in the first place, so you don't need a deduction to undo it. The end result is the same $0 net change in your bank account balance. Also, companies can deduct all expenses from corporate income tax. So if a company pays you money via payroll, or pays that money directly to a charity,t he company will deduct it from corporate income tax either way. The benefit of a company making charitable donations directly is that payroll taxes are avoided (not to be confused with income taxes). Both the employee and the company benefit from this, because normally both the employee and the company pay payroll taxes.