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Dana Anspach

How Much is Appropriate?

By December 11, 2012

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This week, I received a question no one has ever asked before. It was a question about charitable giving. My client sent me an email and said,

"Thanks for talking with us yesterday. I meant to ask for your comments on charitable giving. I'll try to put you on even more of a spot: how much would you expect me to be providing in charitable donations each year? (No fair peeking at previous tax returns!)"

I replied,

"This is an interesting question. I think it is a very personal decision. I would really have no expectation of this number.

  • I have some clients who based on their religion tithe 20% of their income each and every year.
  • I have others who give minimally even though they are high earners.
  • Many go year-by-year. If they feel they have extra, they give more.

If giving is important than I think it needs to be factored in as a budget item and planned for.† That's as exact as I can get on this one! It's just varies too much from person to person!"

To which he responded, "Well played!"

Charitable giving really is a personal decision.† If you are going to give though, there is no reason you shouldn't look at doing it in a tax-efficient way.

Here's an overview of what types of charitable contributions are deducible and how much of a deduction you get.

Comments
December 13, 2012 at 1:40 pm
(1) moneyover55 says:

A dear reader has politely informed me that I am incorrectly using the word tithe. A tithe by definition is 10% of your “net increase” or income given to your church. No more or less. Very interesting!

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