Tax deduction a matter of morality?

    I hope everyone has already filed their taxes. I already got my refund (and I'll explain my plans for it in my next post).

    In this post there are some tax deduction tips and a morality question: Should you deduct charitable contributions (including tithes and offerings paid to your church)?

    Read on:

    If you haven't filed yet and are looking for some deductions, you can see if any of these apply to you: Kiplinger's Top 10 Oddball Deductions
    Now that I know we can deduct "meeting expenses" so long as we go to Bermuda and other places in the Carribean, I know where to schedule my next "business" affair. i.e. a marriage is like a business. So a honeymoon would be like a business meeting... right? ;-)
    And of course deducting body oil is something interesting. Tell the truth, who among you could deduct that right now? I want to know.
    The best one, hands down, is the breast implant deduction. It's #7, just read it.

    But if none of those deductions are possible for you, look here for a list that might actually help you: Kiplinger's 13 Most overlooked tax deductions

    Only #1 and #5 seem to apply to me.

    #1 Sales tax: Tennessee doesn't have an income tax but the sales tax is killer at 9.25% (even groceries are 8.5%). But my tax preparer told me that unless I bought something big -- a house, boat, car, major appliances -- any deduction I claimed would be too small to bother with.
    #5 Out-of-pocket charitable contributions: This is where I get a quizzical look on my face and don't know how to approach this. Claim the ingredients for the casserole you made for charity? I mean, unless you're going broke doing that, why would you claim such a thing? Aren't you making the casserole as a gift? A donation? A service? Should you deduct things like that?
    Even driving to do charity work unless you're putting more mileage on your car for that than you do for your job and personal use, seems wrong to claim. (In the case of driving for Katrina relief work, I think claiming the mileage if fair... that ain't a short trek and the gov doesn't seem to be doing anything)
    My church provides every member with a receipt for the money they've given -- in tithes and/or offerings -- for tax purposes.
    But I didn't claim that on my taxes. It seems wrong to me. If you believe in tithing, you know that you tithe 10%. That's gross, not net, because if you tithe net, then you're paying the government before you're paying God. So, if you get the money back through taxes, then you've gotten your blessing that way, and not God's way, whatever way that may be.
    (To be perfectly honest, I am not officially tithing. 10% of my gross wouldn't allow me to pay down debt at all. Of course, some would argue if I paid my full 10% I wouldn't have to worry about that -- but that's a deeper theological discussion than I want to get into here.)
    If you're not a Christian, or not at all religious, is it still all right to claim charitable deductions like that? I could see if you handed off thousands of dollars... but even then, what it the purpose of your gift? Are you doing it to provide something to your community or are you doing it to hide money from Uncle Sam? Or does it even matter why you gave it, so long as you gave something?
    Personally, it seems there's a hint of hyprocrisy in claiming every little charitable contribution. When I hand $5 to a vagrant or stick a dollar in the Salvation Army drums around Christmas, I may put that into my spending record to know where my money went, but I count that as money gone and hopefully on to do something good for someone. When, how or if it comes back to me shouldn't be my concern. That's what makes it a sacrifice.
   
    I'd love to know what yall think.

    DH
 

   

Comments

[Les]

I think I'm on your side on the charitable donations. I've saved receipts in the past with the intention of using them at tax time, but I don't think I've actually done so. It just seems a little "wrong", as you put it, to be rewarded for helping out - something we should do because we're all in this together, not because we want to save a little out from Big Brother.

[edenz]

It's not wrong, you shouldn't feel guilty and here's why:

There are two parts of the tax law:
1) The government provides services for the benefit of everyone and the money needs to come from somewhere

2) However, the government also likes to influence the behavior of its citizens so that it doesn't have to pay for as many services - since there is no legal way to to directly compel people to do things, the government rewards those people who perform actions the government thinks is beneficial.

So deductions for charity donations are a way that the government rewards people for providing social services. In the case of tithing to your church it also allows you not to pay taxes on income you gave to your church (i.e. making all your tithing with 'gross' not 'net' money).

Basically money you spend on charity is money the government doesn't have to so they reimburse you. Just like if you bought something for your job with your own money.

[Papa Rage]

"So, if you get the money back through taxes, then you've gotten your blessing that way, and not God's way, whatever way that may be."

If you claim it on your taxes, you're not getting your donation back, you are just paying less in taxes. The fact is that all your income is a blessing from God and the fact that you live in a country that gives you a tax break for supporting God's work is also a blessing from God. Not everyone in the world has that.

If you tithe then you owe God and the tax man a percent of your gross. If the tax man says, "you owe me less if you donate to charity." That doesn't change your gross and does not effect your tithe. A refund isn't income, it's repayment of a 0% APR loan.

The bible says that children are a gift from God. Does that mean it's wrong to claim them as deductions as well because then you are getting your blessing from the tax man and not God's way?

Your tithe is income for your church. They refuse to pay tax on it standing on a IRS regulation for being a charitable organization. If it's ok for them to take advantage of tax breaks then it is ok for you too. Put another way, if you question your right to take the tax break, then you must also question the right your church has to take the tax break. Is your church doing the wrong thing by getting their blessing in the form of a tax break rather than just paying their tax and letting God bless the rest?

Finally, paying a tithe is supposed to be joyful rather than robbing you of your joy by making you question the morality of tax deductions and other small worries. Pay your tithe, exactly as you decided you would ahead of time. Pay the tax you owe, as little as you are legally required to pay. Don't worry about the rest.

[Cheryl]

I'm going to have to side with "Papa Rage" on this one...I itemize, and I claim ALL charitable contributions, including my tithe. I am a Big Sister through Big Brother/Big Sisters, and, while I do not consider any money I spend on my Little Sister as "charitable contributions"... I do claim my mileage for various BB/BS activities when I have to drive all over 3 counties!

[Rocketc]

This is a matter of stewardship. If you do not take a perfectly legal deduction, you are not exercising good stewardship. It almost sounds as if you are trying to assuage a guilty conscience by not taking the deduction. If anything, take the deduction and then give the difference it makes in your taxes to your church.

[SdR]

I see where you're coming from, but if you believe you should be tithing gross and not net income then there should be no problem claiming the deductions, since taxes only affect net income. A 10% tithe on a gross income of $50,000 is $5,000 whether you get a break on your taxes or not. The deduction doesn't give you more (gross) income, it only affects how much money you have left over (net income) after giving what is due to God and Caesar. If Caesar wants to take less from you because you give to God, then be thankful! It's a recognition that your donations have an effect on wider society.

[Ms_Leo]

I'm on the wagon with Cheryl...I itemize and claim ALL charitable contributions - monetary and non-monetary. I'm sure there are some small dollar amounts that slip by but would it make a difference in the return? Probably not. If you talk to any tax accountant or financial planner, citizens should pay our tax liability. Nothing more or less...we've been trained in our society to covet this "tax refund" like a gift from the IRS. Umm, no it's money you made and they used as a interest free loan. It was also the money you didn't see in your check every 2 weeks.

I suggest that everyone review your pay stub and your tax return this year to update your witholdings. You designate your witholdings on a W-4 and there are calculators on IRS.gov to determine what that number should be. Ultimately, you should aim to break even with the government. You don't want to underpay and owe, but if you overpay too much you are not putting to good use cash that could sitting at ING or HSBC!

[Matt]

I find trying to squeeze every last deduction out of Uncle Sam leads to bad karma. Take deductions that are intended. Go ahead and deduct the charitable contributions, since that is the intent of the tax law. However getting creative, such as deducting groceries for a casserole, is not only crazy-obsessive, but also makes you into essentially the kind of person who would take the pennies from the free penny tray at 7-11 because it's legal.

[broknowrchlatr]

I wrestled with the decision to deduct contributions but then came to a simple conclusion.

I use Turbo Tax's web site for doing my taxes. I calculate my refund (or lack thereof) based on no charitable deductions. Then, I add in the charitable deductions and get the new refund. The difference gets donated. No sense giving uncle sam a charitable deduction. Anyway, what better purpose is there for a tax refund?

[NCN]

Here's the deal...
The government taxes PERSONAL INCOME. In other words, money that you earn and then use for a PERSONAL PURPOSE. IF you GIVE the money away, then, obviously, YOU did not USE the money, someone else did. So, you should not have to pay INCOME tax on money that you just moved from one source (your employer) to another (the charity). Please, take the deduction! A. You did not receive a financial benefit from the money. B. You can do a MUCH better job of distributing the refund than the govt can do spending it. C. If you feel "guilty"... which you shouldn't... read Romans 8:1 .. THERE is NOW therfore, NO CONDEMNATION for those who are IN CHRIST... but, if you feel "guilty"... get the refund, and GIVE IT away.. You could always buy a text link on NCNNetwork.com :)

[mbhunter]

10% of the gross is 10% of the gross regardless of whether you claim the deduction or even whether the government grants you the deduction. If you'd contribute the same amount even if the government decided to stop giving you part of it back in the form of tax savings, then your heart is probably in the right place.

Actually, come to think of it, who says that God isn't working His will through the tax legislation and giving back to those who give to His church? He may stop this at any time but He will not abandon His disciples.

[mbhunter]

By the way, no need to write down giving money to a vagrant. It's not deductible. Contributions to individuals, regardless of how needy, do not quality as deductible charitable contributions.

[Jen]

The way I look at charitable contributions is, no, I don't deduct every little thing. As you said, ingredients for a cassarole, that would make it more work that it is worth. But, for instance you said if you tithe after paying the gov't it is like paying them before God, well technically you do anyway. They are taking taxes on your full income (unless there is some kind of pre-tax deduction that I don't know about which may be the case) so in taking the tax break you are getting the money back that the gov't taxed on God's money. If it still seems wrong then do this- get the tax break, figure up how much you got back (if you get a refund) from that specific deduction and give it to your church.

Personally, I always get receipts when I donate to Good Will, etc. I believe my children need that money more than the feds, so I don't even flinch.

Great post though!

[JBL]

The government really has you brainwashed if you feel that you are being "rewarded" for being taxed less. It may seem as though the government is "reimbursing" you for having made your charitable donation, but they certainly are not!

[joe]

No you shouldn't deduct your tithing. I'm sorry, but churches are not 'not for profit charities'...just look at all the mega-churches these days. It is a pity that they don't have to pay taxes in the first place.

[Jason King]

Great discussion on tax deductible issue..
Does anyone have Biblical position on taking the tax deductible status??

Technically, deductions are,allowed for any institution which provide a benefit to the society..Does church really do that OR does it simply provide an organization to express one's religious belief ?? By doing so "Christians" allow free $$$ to be gotten by let's say...Street corner "spiritual Center" It seems like a dangerous proposition...

If everyone is really honest, most just follow the tradition of tax deduction, and couldn't really careless why??

Consider, what if all tax deduction was removed from all religious organizations?? Would "Christian" churches stay open?? Hummm...I think not..

So why not be just honest..It's about the $$$$, and not about serving God..

[order propecia]

Believe in karma and everything will be all right.

[Derek Platt]

But you have to donate in excess of the standard deduction in order to deduct donations. So, everything that you donate up to that point comes from your pocket. Everything after that point is your way of saying where you want your excess tax dollars to be spent.