If I donate to charity, how do the tax deductions work ?
March 13th, 2010I’m writing a paper and want to make sure that I get the facts straight 
Is the current tax system of the US like this?: the amount of tax deducted is more than the amount donated to charity. for ex, if I donate 00. then I get more than that deducted from my taxes, eg, 00? THANKS!
Replys
No. If you donate $1000, you save between 0 and $350 in taxes. The amount you donate is a deduction, subject to certain limits. Then, if you itemize, you subtract all your deductions from your income before calculating your tax. You will not itemize if the standard deduction is greater than the total of itemized. If you do not itemize, your tax savings is 0. If you do itemize, your tax saving is the tax rate you would have paid times the difference between your itemized deductions and the standard deduction. If you would have itemized even without the charitable contributions, then your tax savings is your tax bracket (from 0% to 35%) times your contribution. Even this may not be right if you also have tax credits which would wipe out your tax.
No. Not at all.
If you donate $3000 to a charity, you get a $3000 deduction if you itemize.
No, it is a deduction of taxable INCOME, not tax liability. To even be able to claim a charity donation AT ALL, you must be able to itemize your deductions.
Almost everyone donates.
Only 30% of taxpayers itemize, so only 30% would be eligible for a benefit. If they donate $1000, they *might* get some money back. No more than their tax bracket. My tax bracket this year is 10%, so I’d save $100.
If I donate non-cash items, I don’t even bother taking a deduction. Clothing is worth virtually nothing and I’m not going to waste time arguing that a pair pants is worth $1 or 50 cents with an auditor.
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