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Old 04-01-2002, 07:42 PM
sirhibernac
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Non Profit Deductions


I live in Alabama.

Please excuse my ignorance when it comes to taxes. I'm young and trying to figure things out for filing issues next year.

My wife and I are planning on trying to donate more money this year to our church. My question is that if I donate more than what is owed to the government in taxes at the end of the year do I get the difference back?

Example:

I donate $4000 throughout the year and can deduct the amount.
I only owe $1500 in taxes.
Do I get the other $2500 back as a refund?
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Old 04-03-2002, 02:45 PM
loku
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You can donate and deduct up to 50% of your adjusted gross income for the year to a church. That means if the adjusted gross income of you and your wife is $28,000, you can donate and deduct up to $14,000.

However, I am not sure you understand how the deduction works. You can deduct amounts you donate to the church as an itemized deduction on Schedule A. The amount you deduct is not subtracted from the tax you owe, it is subtracted from your income, and the tax is computed on the remainder. For example, if you itemize deductions, and if the taxable income of you and your spouse, without the contribution deduction, is 20,000, your income tax would be $3,004. If you made and deducted a contribution of $4,000, your taxable income would be reduced to $16,000, and your income tax would be $2,404, so the $4,000 contribution would save you $1,600 in income tax. If you don’t otherwise itemize deductions, your savings would be less.
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Old 04-03-2002, 05:56 PM
sirhibernac
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Ahh!


Thanks. I understand now.
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