People have the option of writing donations to nonprofits
off their taxes. To qualify for write-offs in April, donations must be made by
December 31. With this deadline approaching, it is appropriate to address the
controversial topic of Christians using tax write-offs. The position I will defend
in this post is that tax write-offs not only can ethically be used, but should
be used. This is not a biblically-based argument, but rather one of sagaciousness.
There are many with the conviction that they should not
write off donations to Christian organizations, especially tithes to churches,
because this creates a selfish incentive to giving. Of course, if the
motivation to tithe and donate is not tax write-offs, then it really doesn’t
matter, anyway. It is completely possible to have pure motivations for giving
while also taking advantage of laws that allow that amount to not be taxed.
If individuals are worried that tax write-offs will make
their sacrifice less of a sacrifice, there is a simple solution. Tithe on the
benefits, or give the amount saved to charities and churches as well.
The government has given us the ability to increase the
funds to churches and Christian nonprofits without costing us anything extra.
This isn’t avoiding sacrifice—it’s common sense.
I am not against using savings from tax write-offs for
worthy things like paying bills or decreasing debts. With this I have no
problem. But for those that do have the conviction that giving should be
sacrifice, sagaciousness dictates that the write-offs still be used.
Let’s use a
hypothetical couple to see what I mean. Let’s say that there is a couple
with a combined annual income of $90,000. They tithe $9000, give another $9000
to the church for missions and other special projects, and donate $5000 to
other Christian nonprofits.
$90,000 – $23,000 = $67,000
So now, instead of paying taxes on $90,000, this couple is
paying taxes on only $67,000. So, let’s calculate their federal income taxes (using the estimated
2016 income tax brackets from the Tax Foundation):
The first bracket is 10% on the
first $18,550 made.
$18,550 * .1 = $1855
The next bracket is 15% after the
$18,550 up to $75,300, but since the taxed income is $67,000, it is up to
$67,000:
$67,000 – $18,550 = $48,450 * .15
= $7267.50
So, the couple, using write-offs,
pays $9122.50 in federal income tax.
Now, let’s say the couple decides not to take the tax
write-offs:
They still pay the $1855:
$18,550 * .1 = $1855
Now, instead of the second bracket
going up to $67,000, it goes up to the full $75,300:
$75,300 – $18,550 = $56,750 * .15
= $8512.50
Then, the couple actually moves up
into the next bracket ($75,300 to $151,900) for the remainder of their income,
which is taxed at 25%:
$90,000 – $75,300 = $14,700 * .25
= $3675
So, without the write-offs, the
couple pays $14,042.50 in federal income tax.
This hypothetical couple can save $4920 simply by writing
off their $23,000 in donations to nonprofits.
Now, as mentioned before, some people may not be comfortable
with using tithes and donations to save money on their taxes. But, may I
submit, that the savings from tax write-offs be given to nonprofits as well?
The hypothetical couple is essentially given $4920 from the
federal government for giving to nonprofits. If they want to continue that
sacrifice, they can donate that $4920 to their church or to a Christian
nonprofit as well. That’s free money they received because of what they’ve
already given. It especially helps that they avoid the 25% bracket.
It simply doesn’t make sense to leave that money on the
table when it can be used for good. All you do is transfer the money from the
federal government to Christian nonprofits. That’s an obvious deal to take. For
the hypothetical couple, that’s almost $5000 more in the hands of their church
or other nonprofits, with no extra expense.
So, if you want to truly sacrifice, I commend you. Just take
advantage of federal laws and give that extra money to churches and Christian
organizations.
Crunch
the numbers yourself, and see how much more money you can give.
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