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Tax Credit for Tithing

Some people give money to their churches or other charities, then they want to deduct that donation from their taxable income. A deduction can reduce the amount of money they owe for federal income taxes. That is especially true for people who give a tithe, commonly defined as a donation of 10 percent of income. However, the Internal Revenue Service has strict rules and regulations for claiming tax deductions.

  1. Background

    • The practice of giving 10 percent of income in modern times stems from the Bible. Tithing is a voluntary practice in many churches and religious organizations. However, some churches use math to persuade members to tithe. One example is Simpsonville, South Carolina-based Church of Greenville at Standing Springs and its website, "Let There Be God." The church explains that utilizing the tax deduction reduces the actual cost of tithing. The church says that someone in the 30 percent tax bracket who donates 10 percent of his income and can claim the tax deduction saves enough on taxes to reduce the final cost of that tithe to 7 percent.

    Tithing

    • The IRS classifies tithing as a charitable deduction if it qualifies. To deduct a contribution, the individual must make a voluntarily donation without expecting or receiving any substantial benefit in exchange, according to IRS code. To deduct tithing, you must file Form 1040 and itemize your deductions on the Schedule A, according to the IRS. Therefore, if you do not have enough deductions to itemize and take the standard deduction, you cannot deduct tithing from your income taxes.

    Documentation

    • In addition, the IRS requires a record of the donation. For donations of $249 or less, the IRS will accept a bank record, such as a canceled check. The IRS requires written acknowledgment from the organization for donations of $250 or more. The letter or receipt from the organization must include its name and the date and amount of the donation. However, if you make a series of donations in amounts of under $250 each, you do not add the contributions together, so the rule of only requiring a canceled check applies.

    Eligibility

    • The IRS only allows the deduction of tithing paid to certain organizations. The group must qualify under the IRS code as a tax-exempt 501c3 nonprofit organization. The IRS lists them in Publication 78 Cumulative List of Organizations, which is also available online so people can check to see if an organization qualifies. However, churches and religious organizations are not listed because they do not need to apply for a tax exemption, according to the IRS.

    Statistics

    • The number of people who tithe is decreasing, according to spiritual development research company Barna Group. The national tithing rate among adults dropped to 4 percent in 2011 from 7 percent in 2010, Barna says.

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