This has always confused me and I'm wondering if I just got it wrong. I've seen a lot of talk about charitable contributions lowering your tax liability. I just read an article saying something along the lines of "a change in the law that raises taxes for income over a million dollars may result in increased charitable contributions to try and lessen the sting". As I understand it, on a basic level:
Let's say you make 500,000. You're taxed 25%. You have $375,000.
You make 500,000. You donate 50,000. You now only have 450,000. You pay taxes on that and get 337500.
How is this a benefit? Of course if you want to support a cause I get it but aside from that, you are still technically going to have less money in every single scenario right? There is zero scenario where this is somehow a smart strictly financial decision?
Submitted April 01, 2024 at 11:36PM by speedoflife1 https://ift.tt/TezyL1q
