I understand the write off part. The part I don’t understand is if you give me $100, and then I donate the $100 (so cost of donation becomes $80), do I have to report that your $100 donation to me as income? Or did I just use your money to decrease my tax burden?
On a personal level you can deduct it from your income, but only if it passes a certain threshold…but also, it doesn’t really count as income before a certain threshold, so realistically, at that quantity, it doesn’t matter.
It starts mattering when you start dealing with donation quantities nearing like, $10000, because then you start to run into the standard deduction (the assumed amount that “well everyone just donates this amount, we don’t need to keep track of it all before then, we’ll just hand that exemption to everyone”). I forget what the gift threshold is in a similar vein, but it’s not as low as $100.
Edit: I went through all that and didn’t really address the core of the question. If you get paid a large amount of money, say, $20,000 and then donate all of it, ignoring the standard deduction whackery as discussed above (as a corporation would effectively do), yes, your taxes will have you deduct all of the donation from your income (you will not have to count it as revenue, essentially) if the group is registered properly with the IRS. You do not reduce your tax burden further than you would have if you had not received the donation, you essentially get taxed as though you never got the money at all.
From the store’s perspective, money donated through the point of sale and given to charity is neither income nor a deduction. It’s just the collection of money that doesn’t count as anything to the store’s finances.
In the same way, if I pay rent for my entire unit and collect the portions owed from my roommates, the money my roommates pay me don’t count as my income. I was just passing it along, and it was never mine to begin with.
I understand the write off part. The part I don’t understand is if you give me $100, and then I donate the $100 (so cost of donation becomes $80), do I have to report that your $100 donation to me as income? Or did I just use your money to decrease my tax burden?
On a personal level you can deduct it from your income, but only if it passes a certain threshold…but also, it doesn’t really count as income before a certain threshold, so realistically, at that quantity, it doesn’t matter.
It starts mattering when you start dealing with donation quantities nearing like, $10000, because then you start to run into the standard deduction (the assumed amount that “well everyone just donates this amount, we don’t need to keep track of it all before then, we’ll just hand that exemption to everyone”). I forget what the gift threshold is in a similar vein, but it’s not as low as $100.
Edit: I went through all that and didn’t really address the core of the question. If you get paid a large amount of money, say, $20,000 and then donate all of it, ignoring the standard deduction whackery as discussed above (as a corporation would effectively do), yes, your taxes will have you deduct all of the donation from your income (you will not have to count it as revenue, essentially) if the group is registered properly with the IRS. You do not reduce your tax burden further than you would have if you had not received the donation, you essentially get taxed as though you never got the money at all.
From the store’s perspective, money donated through the point of sale and given to charity is neither income nor a deduction. It’s just the collection of money that doesn’t count as anything to the store’s finances.
In the same way, if I pay rent for my entire unit and collect the portions owed from my roommates, the money my roommates pay me don’t count as my income. I was just passing it along, and it was never mine to begin with.
Yea I guess I was thinking something like this
I would have to include the donation either in my earnings or report it some other way.