Saturday, November 11, 2006

Giving Calculator

I came across a neat tool at Charity Navigator: the Giving Calculator.

Consider the following example:

  • You're married
  • You and your spouse file taxes jointly
  • You have a combined annual income of $50,000, which gives you a marginal tax rate of 15% (at the Federal level; does not include state or city taxes)
  • You and your spouse feel you can afford to donate $100 to your favorite charity
  • You type $100 into the calculator and realize it's only costing you $85 to donate $100, due to the tax break
  • You play around with the tool until you determine you could donate $118, and the after-tax impact on your pocketbook is only $100

The link notes, however, that the standard deduction for a married couple filing jointly is $10,300, so unless your itemized deductions are greater than the standard deduction, you gain no financial benefit from a charitable donation.

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