Post: #1

I have googled it and it really makes no sense.

Here's what I understand: you can donate up to half

So someone making 1,000,000 could donate 500,000 and bring their taxable income to 500,000

I really don't get the point because they still end up with the money gone.

Not a troll thread. Being completely serious and trying to understand the logic of the wealthy giving donation and t he tax break.

Post: #2

You donate to a charity you control.

Post: #3

Are you trying to understand the logic of why the rich give to get the tax break? Or the logic behind the tax break in the first place?

Post: #4

(09-18-2013 07:04 AM)Ensam Wrote:  You donate to a charity you control.

Its a softer version of this. Essentially you avoid having to pay tax (15 to 30 cents, 30 - 45 cents if you are also paying self employment tax) on the dollar you gave to charity. Find a charity that is small enough for your donation to get special treatment and you'll get more benefit from it than paying it as tax.

There's also an advantage if you can use your donations to get yourself under the capital gains threshold. Once you cross 72,000 in income you go from a 0% tax on dividends to 15%, you can use charitable giving to stay under that.

Also, there is an advantage to it if you are a corporation. You can declare that you intend to make a donation at the end of the year but aren't obligated to pay it until your tax return is due, you can then shop around or negotiate with the charity before you pay.

Last, churches or religious organizations are probably the best option if you can make a significant contribution. Not only are they tax deductible but they don't have to file any sort of return on what they do with their money...well actually the same goes for charities with revenues of under $50,000

So, there are many reasons, the biggest being its really the only way to control or reduce your taxable income for the year if you're going to be screwed by having it just over a certain threshold.

* Remember this is all 'what if' not actual tax advice specific to any one person's situation. Its not to be relied on.

Post: #5

Edit: Double post

Post: #6

What it basically means is that you can give a tax-free donation to the charity of your choice. If you give $1000 to j.r.'s Home for Wayward Skanks (which is accepting donations, by the way) and your tax rate is 30%, that is $300 less dollars that goes to Uncle Sam. So, you're able to give $1000 for the price of $700.

Post: #7

(09-18-2013 07:46 AM)j r Wrote:  What it basically means is that you can give a tax-free donation to the charity of your choice. If you give $1000 to j.r.'s Home for Wayward Skanks (which is accepting donations, by the way) and your tax rate is 30%, that is $300 less dollars that goes to Uncle Sam. So, you're able to give $1000 for the price of $700.

This.

It may come as a surprise but lots of people enjoy giving to charity.

I give to animal shelters and Operation Smile (fixes a kids fucked up face/cleft pallet, gives them a chance to live a normal life for $350 per kid).