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Morality of Deducting Charitable Contributions

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I was poking around Debt Hater this morning when I found her post about how she wasn’t deducting her charitable contributions to her church on the grounds that her donations (tithe) should be 10% gross, not net, and you shouldn’t be rewarded for doing it (the deduction). Here’s what she said:

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.

The fundamental difference in thinking is probably with the perception of the deduction – DH sees it as the government giving you money (a reward) whereas I see it as you keeping your money. If you donate 10% of your gross income, you’ve actually lost 12.5% of your gross because 25% of that has gone towards the government. So if you’re paid $100, you donate $10, you’re actually down $12.50 because $2.50 of that $10 donated goes towards the government in taxes on income. The government has decided that donations are not considered income (in effect) so they let you deduct it, thus you get the keep the $2.50 because you gave away the $10 (the government is not rewarding you, you are merely paying less because you’ve in effect, out of your generosity, earned less).

Now, let’s say you still aren’t convinced that you should deduct it. If you deduct it, you can donate $12.50 instead of just $10 – thus not only are you not keeping it, you’re making your gift that much larger. Of course, now you deduct $12.50 on your taxes instead of $10 and the never-ending math cycle continues, but you get the idea.

As for the question of “Are you doing it to provide something to your community or are you doing it to hide money from Uncle Sam?” I don’t see how donating money is hiding any money because you don’t get that money back later.

DH, I think you should take the deduction.

What do you all think?

{ 39 comments, please add your thoughts now! }

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39 Responses to “Morality of Deducting Charitable Contributions”

  1. CK says:

    I think it’s in line with her ideals to deduct it and then give the “profits” from the deduction to the church. Seems like a win win

  2. Rob Carlson says:

    There’s a good analysis at the Wikipedia article “Render unto Ceasar…”

  3. Papa Rage says:

    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?

    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.

    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.

  4. Paul says:

    “Paying God”??? haha!

    That’s ridiculous.

  5. Phil says:

    In my view — when I tithed — I did it based on net, not gross, income (at this point in this discussion, whether you do net or gross is a personal issue). As such, I would take that deduction and go on with life. Theoretically, I probably could have been that much more of a “good steward” and have taken that portion of my tax refund and tithed it as well, ad infinitum.

    This ties together civil and theological issues. “Rendering a tithe” to the church is clearly a personal choice that any church-goer has to make — as well as the degree to which it is done. As far as the US’s IRS tax laws are concerned, that is more of a legal issue, in that you’re “allowed” to take back a portion of your withholding as per a number of different variables, to include adjusted gross income (AGI) and, consequently, your marginal income tax rate.

    Most everyone has a different view on this issue, so the fundamental questions to be asked are, “Do I tithe? If so, is it against my belief system to legally credit back to myself what the government is, in effect, encouraging me to do?” Remember also that paying taxes is, theoretically, a voluntary act on the part of the taxpayer. As such, if you don’t want to take the charitable contribution credit, then don’t do it.

    -phil

  6. Rocketc says:

    Taking a tax deduction is an act of good stewardship. There is no real benefit that comes to an individual for taking a tax deduction. If “Ceasar” does not deserve the extra taxes, why give it to “him”? Sounds as if Debt Hater is somehow trying to assuage her conscience – a product of a culture that makes successful people feel guilty for being successful.

  7. RAMAC says:

    The difference in philosophy regarding whose money is involved, is so important I don’t want it to get overlooked. The general philosophy of some in government is all money is the governments which is theirs to distribute through a tax and distribution system. How else do you explain the discussion of tax cuts that would allow someone to keep more of the money they earn as “expenditures”?

  8. I think that she should claim the deduction. That being said, I am agnostic and thus do not believe that God requires me to tithe at all. I just do it because I want to. If that is God’s will working through me, then so much the better. If it isn’t, then that’s fine with me too. I believe that I should follow the laws of the land, and the laws allow me to make that deduction against my income.

  9. Of course, 10% of gross given to God sounds like a wonderful deal… for the Church. I mean here they get 10% gross of all their members’ salaries and income to do with as they interpret what God pleases… And that all sounds dandy and fine, until…

    But you have to figure that there a number of problems associated with tithing.

    1. tithing started prior to national tax rates in excess of 20% of ‘gross income’, ‘compulsory contributions’, house taxes (depends where you are), VAT, fees, etc.. It is quite shocking once you begin to add up just HOW much money you give to Caesar, as an employee. I’m sure in Roman times, tax rates were not as high!

    2. Then of course, you have to give 10% of gross salary to ‘God’, too. That’s 10% of gross from a salary that is NET of tax, ie. well in excess of the actual money you get to spend.

    3. These days, governments do try to care for poor people in the community, in many countries (hence we pay taxes as a form of social redistribution), based on humanistic principles that we should look after those less fortunate. Our contexts have changed…

    4. You aren’t really giving the money to God, anyway. You are giving the money to a bunch of people who may or may not be like minded. In other words, when you donate to your church, what exactly are you donating to. In the U.S., there is little or no oversight of religious donations, even when the scandals involving ministries are quite gross.

    5. Lastly, think about that the reasons why this kind of commandment is frequently mentioned. Those in power in the religions (and Christianity is NOT exempt) use guilt to extract their pound of flesh from the congregations, otherwise many of them would cease to exist, they would have no power to run flashy TV stations, radio channels, expensive websites…

    So when you hand over your money to your church or religious group or whoever, while you are fulfilling your good stewardship as a general command, who are you really serving? Your own bad feelings at not giving or God’s good graces? And who are you giving it to? What will they do with the money? Who will supervise them? Can they demonstrate that, in the essence of moneyspeak, they will have good governance over their financial resources?

    Investors, if you tithe, you still must do your due diligence.

  10. Augustus says:

    Consider it from a societal perspective as well (government BY the people): we have collectively decided that giving to charity is a GOOD thing, so we reward it with a tax deduction. I think it brings glory to God to incent goodness.

  11. Dustin says:

    Plus you could give the extra you get back from taxes to the charity to give back even more with no benefit to you.

  12. Craig says:

    First, from my perspective the main purpose of tithing has nothing to do with who gets the money. Instead, it’s a matter of putting God first in your life, putting your trust in Him, and acknowledging that whatever income you’re blessed with is directly or indirectly attributable to Him.

    As to the DH’s original issue, while technically tithing on your gross and taking the deduction fulfills the letter of the law (and is what I do personally), if it doesn’t sit right on DH’s heart then she shouldn’t do it…if she does she is defeating the purpose of the act in the first place.

  13. Stephen says:

    Scripture refers to tithe as the “first fruits” of your labor. So, it would be correct to donate to the church before considering your taxes. However, by that same logic, the government is taxing you on the money you have left, so there it does not make sense to withhold the fact that you donated money from the govt. What they take after you have donated has no bearing on how much you donate.

  14. Kimberly says:

    Whether you’re tithing or giving to a public charity, these organizations provide services to the community so that the government doesn’t have to (or the government can provide at a lesser extent). Therefore, giving you a tax deduction on your charitable donations is just a way of saying “Thanks for not making *us* pay for those services to society.”

  15. Posco says:

    investorblogger’s five points appear to make him a non-Christian. Since this post is about the Christian practice of tithing, I will offer a Christian response. It’s easy for non-Christians to poke holes through any of my response below, but please refrain. I’m not trying to convert you.

    1. A Christian “believer” ultimately trusts in God for his material supply. In the spirit and principle of cooperation between divine and human, a believer works diligently for and is paid by his employer but he views this pay (and even the fact that he has a job) as provision from God. The basis of Christian consecration is that the believer himself and everything he owns belongs to God. If human government imposes taxes, a believer believes God will supply the means to pay, as all proper government authority flows from God anyway.

    2. See above. 100% comes from God, so it’s not a hard thing for 10% to go back to Him.

    3. The Roman Empire also collected taxes for the common good. But that’s besides the point. Tithing is not an issue of giving to the poor. It’s an issue of loving God over material possessions. (Matt. 6:19-21)

    4. To a believer, putting money in the box or on the plate IS giving to God. There is a spiritual reality behind the physical practice. Now, in the physical practice, yes, there are other humans who are responsible as stewards for that money. A Christian should be aware who is taking care of the money. While there is little U.S. GOVERNMENT oversight, my church does have eldership oversight as well as accountants, and we members know and trust our eldership. We give in good faith. If there is hidden impropriety, then God will be the final judge. That’s little comfort for non-believers, but that’s the nature of things I guess.

    5. I agree. My church uses “the podium” to speak of tithing VERY INFREQUENTLY (not more than once a year), and guilt is NEVER a motivation. Giving material possessions is a very personal matter and should be done in secret. Therefore, even the amount (10%) should not be enforced by human hands. Rather, according to the New Testament, the intention and consecration of the heart is more important. See Luke 21:1-4 concerning the widow casting two pennies into the treasury.

    Your questions are valid for all believers. And some believers have good answers, believe it or not!

    BTW, in response to the original post, I agree with jim that it’s just fine for a Christian to take the deduction. The deduction represents the Government not taxing your generosity; it does NOT represent the Government GIVING you anything as a “reward” for giving. Pardon me for saying it, but that’s just ignorance at best.

  16. I was just talking with God about this the other day. He didn’t seem to care so much between 10% gross or net. Furthermore, he said that 10% is just a made up number by someone on Earth to begin with. So I asked him what he’d prefer. He said that he’s not too concerned about money donations – he’s got bigger fish to fry (not literally of course). It really sounded to me that he just wanted us to do the best we can to help out fellow man.

    Oh and he had a comment to pass on to Jim… He said that he didn’t like what you did last Tuesday. He didn’t go into any further, as he said that it was a private matter and really none of my business (which is true).

  17. JimmyInGreatLakes says:

    Amen Posco. Tithing is an attitude rather than an expectation of return. I believe that when we give in obedience, it changes the heart. If God chooses to bless us in regards to that aspect of our faith then we can also rejoice about that blessing. If that blessing happens to be financial, we should turn over 10% of it as well.

  18. moom says:

    If you take the deduction then you can afford to give more money to your charity! Why give a share to the government unless you think it is a good charity :) Of course if you don’t itemize deductions on Schedule A (which most taxpayers don’t do) there is no deduction anyway.

  19. moom says:

    PS. The original tithe in the Old Testament (ma’aser) is 10% of some crops paid to support the priests (kohanim). The priests owned no land to grow crops and had to paid somehow so this tax paid their wages in food. It is also a Jewish tradition in more recent periods to give 10% to charity. But I don’t really know how many really donated that much, probably only really wealthy people, especially with the high taxes which help the poor among other things (especially in Israel there are high taxes!) as has been pointed out above. Also I think the idea in Christian communities of giving tithes is much stronger in the US then in other countries where churches tend to be more government linked and established.

  20. Ben Zeen (a pseudonym) says:

    The cycle is never-ending, but as a geometric series, it does converge. Donate $13.33 and take the deduction. $13.33 * 0.25 = $3.3325

    No deduction: Earn $100, tithe $10, pay $25 in taxes. You net $65, church gets $10.
    Deduction: Earn $100, tithe $13.33, pay $22.67 in taxes. You net $65, church gets $13.33.

    Of course, heaven help you if you make $50,000…

  21. mbhunter says:

    God is to receive the firstfruits of my labor (Proverbs 3:9-10), which means “off the gross” in my interpretation (and the interpretation of others that I respect.) So 10% off the gross is 10% off the gross, regardless of whether the government grants you a tax deduction based on that contribution.

    The real question should be: “Will you continue to contribute the same amount even if the government doesn’t grant you a deduction?” If the answer is yes then your heart is probably in the right place. I consider the tax deduction a gift from the government that can be rescinded at any time, and not at all connected with what God commands, since the deduction applies categorically to all charitable contributions, not just church offerings.

  22. nickel says:

    Huh? As others have pointed out, if she doesn’t want to ‘profit’ from her contributions, then deduct the tithe and donate the tax savings (either to her church or to another charity). As it stands, that money is legally hers and she is effectively choosing to donate it to the government. So why not choose to donate it to something more worthy?

    And MBH is right — 10% of gross is 10% of gross. Whether or not she takes the tax deduction, she is still doing her ‘duty.’

    Sheesh. Some people really go out of their way to overthink things.

  23. Tim says:

    if you want to tithe, then just tithe and forget about the deduction all together. then there won’t be any dilemma on your part.

    • AJ says:

      But see, it’s not just about having a dilemma. It’s simply that we as Christians should give without expecting anything in return (i.e. tax-deduction). What we get in return in whatever God chooses to bestow upon us.

  24. plonkee says:

    If you are being rewarded for making a charitable contribution by having reduced taxes, then I can see why you might think that taking the deduction is unethical. Personally, I think that (any) government spends my tax money in ways that I don’t want it to, so its more ethical for me to take the donate the deduction.

    Either I could work out the convergence of the geometric series to get it to work out right, or I could take the deduction in the next financial year (in addition to the standard tithe) and so on, making larger and larger charitable donations. The latter seems like easier maths and also more generous, so that (to me) would be the better of the two options.

  25. Amanda says:

    I think that everyone is over-thinking this. Something tells me that God isn’t interested in nickel and diming everyone. Tithe or don’t tithe. Give or don’t give. Deduct or don’t. It doesn’t matter – just do what feels right for you.


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