If you are a religious person, there’s a chance that you have heard of tithes and offerings before. They are something that you can give to your church or house of worship, or other charitable organizations, to give back. These cash contributions to charitable organizations, or a church, is typically 10 percent of your monthly gross income. If you’ve been wondering how your tithe to a church or donations to charitable organizations are taxed, then worry no more. It can be claimed as a deduction on your income taxes on your tax return, although the church must be recognized by the Internal Revenue Service.
How do tithes work for this tax year on your tax return? Why is it tax deductible? How do you deduct the amount anyway? What does that charity do to your taxes anyway? These are some of the questions that people have about tithing, and it is these tithing questions that we are going to answer.
What Is A Tithe?
First up, we need to define what a tithe is and what it constitutes. It is ‘one tenth’ of something, and it is paid to a church or religious organization. An offering to your church or to another religion focused group is considered a tithe. In the Christian religion especially, many worshippers believe that Jesus taught about giving tithing or offerings to the church as a donation. Tithing remains an important doctrine for many branches of the Christian religion.
Tithes are not the same as offerings, because while a tithe is 10 percent of your income, offerings are anything above that given as a cash donation. Although tithes and offerings tend to be used in conjunction with one another. For the most part tithing is strictly voluntary, but many people and families tend to save 10 percent of their cash to give away whenever the church collects offerings.
In the Christian Bible, Tithes were first mentioned when the Prophet Abraham gave a donation of 10 percent of the spoils of war to a king, and the Jewish people later gave 10% of the food from their farms up for storage to prevent famine, one of the first charitable donations, although it was like a tax. The 10 percent amount was later mentioned by several prominent figures in the Bible, including Jesus, who associated the practice of tithing with mercy and justice- not with IRS tax deductions.
How Do Tithes Work?
A tithe is deductible from your taxes, helping to reduce your taxable income by the IRS. Here's the formula for how to deduct your donation from your income.
For example, if you had to pay a 10% income tax on your income of $30,000, the income tax would be $3,000. If you tithed $1,000 dollars, then your taxable income is going to be reduced to $2,000.
The itemized deductions are not going to abolish your taxes entirely, because you can only deduct 50/60% from your income tax, but it can reduce your taxable income and give you a reward for giving out a donation.
Is Your Church Eligible?
For your donation to be tax deductible, your church needs to be eligible to be recognized by the IRS.
Is A Tithing Tax Deductible?
The answer is… probably yes. There are a few things you need to consider before making a claim for a tax deductible tithe for your charitable organizations or churches. Most charitable cash acts involving a church, including giving a tithing tax deductible, are tax-exempt, as long as they follow a few official IRS rules.
The first is that the donations can't deduct cash larger than 50 or 60 percent of your gross income. You can’t use donations as a way to pay for lower taxes if they exceed 60 percent. You also need to itemize these tax deductions, and all donations need to be made before the end of the tax year. The itemized deductions tends to be the thing that stops most people in their tracks when it comes to dealing with tithing and taxes with the IRS. It may benefit you to learn how to report a 60 day rollover on your taxes, just in case, as well.
Does It Have To Be Exactly Percent Of Your Adjusted Gross Income?
While the Bible does have an obsession with the number 10 as charitable contributions, there is no limit to how much or how little you can claim as a tithe. 10% is just a baseline to work off of, but you can give more or can give less. You still should keep track of your tithes, both so they can be properly itemized and so you can keep track of for your budget tithing tax deductible.
An easy way to keep track of your tithing tax deductible, aside from noting down every piece of cash you pass at the offering plate, is to calculate what 10% of your annual income looks like. It might be $500, or it might be $40. Have that number in mind and then divide it by the four Sundays in each month. That number is roughly how much cash you should give a week.
If it is a smaller number you can get away with simply placing the dollar bills in the offering plate when it comes around. For larger numbers you can often give online to your church through their website, and your specific church should likely have more information about their giving practices.
In many churches, it is customary to give what you can as some charitable donations. If you are dealing with a low month, then you can give less donations, and if the month has treated you well you can give more donations. Your church should also tell you where this money is going. It could fund a mission trip be donated to a charity or some charitable organizations that your church cares about, or could go to keep the day to day operations of the church running.
Is It Moral to Claim Tithes As Tax Deductible?
Some Christians can be a bit apprehensive when it comes to getting personal gain from a donation they gave to God. They don't want to know the answer to if the tithing tax deductible. However, the United States has pushed for tithes to be tax deductible, and there shouldn’t be any moral obligations to itemized deductions. Various Bible heroes, including Jesus himself, have all talked about tithes and giving 10% of what you earn as donations to others
You shouldn’t have any moral or religious objections to giving away a portion of your income as tithe donations. If you do you might want to talk to your pastor. Your tithes are going to be used by the church to help people and can be thought of as charitable donations, so why shouldn’t they help you with the tax as well?
Do I Have To Give My Tithe To the Church?
This is completely up to you, although many pastors attempt to say that the full 10% claim should go to their church, you have a choice because it is your donations. Giving a tithing tax deductible is fine as long as the church is eligible, you do not have to be a member of a specific church or denomination to give them donations.
Some people say that tithes should only be given to the church you are a part of, while offerings (any giving above the 10% amount) should be given to other churches or organizations. Others say that it doesn’t matter where you give donations as long as you are doing it with God in your heart.
You can give your tithing tax deductible claim to the poor, a soup kitchen, an animal rescue service, or any other place that is dedicated to helping others as charitable donations. Don’t let a pastor pressure you into pouring all your funds into the church, because at the end of the day it is your choice. Again, your church should tell you where the offerings for the week are going, so you can decide if it is a cause you want to give your tithing to.
Final Thoughts About Tithes
If you want to give a percent of your adjusted gross income to the church in order to spread your wealth and help those in need, you can do it. It can be 10% or 50%, given to one church or many, and it can still be tax deductible when the IRS looks at at the claim filing.
No matter what, you can get the benefit from your tithe deductions as long as it is going to an eligible church. There’s no reason not to give and make note of this on your income tax, because you receive a benefit too.
Talk to a licensed financial service provider for more information regarding taxes or any other financial questions such as how to invest 10 million dollars.
Disclosures:
The opinions expressed in this material do not necessarily reflect the views of LPL Financial
Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Stratos Wealth Partners, LTD., a registered investment advisor. Stratos Wealth Partners, LTD. The Kelley Financial Group, LLC are separate entities from LPL Financial.
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