Is Tithing a Tax Write Off in Tax Season? Understanding Taxes, Tax Deductibles, & Tithes - Does It Qualify for a Tax Deduction?

Churches rely on charitable donations from the congregation to fund most of their operations during the financial year. Tithes are monetary contributions members make weekly, monthly, or annually, offering 10% or more of their income to the organization.

Christians are fine with tithing their income because they consider it the right thing to do in God's eyes. They feel it’s a certainty that their tithes will improve the church, allowing it to maintain and expand its facilities and outreach programs. 

However, many members are unclear on the relationship between tithes and taxes. Is tithing a tax write-off in tax season? Can Christians claim their tithes as deductions on their taxes? What do IRS rules say about tithing and taxes? 

It’s important for churches and congregations to understand the tax code and how it applies to charitable donations like tithes. Remaining compliant with the IRS reporting rules ensures donors stay on the lawful side of the government and God.

We need a better understanding of the practice and how tithes take the form of charitable donations. The tradition goes back millennia and originates from a time when today's monetary system and our reliance on cash incomes was almost non-existent. 

In the early years of organized religion, many Christians didn't earn a monetary income. Instead of cash donations, they offered livestock or crops to the church. Today, it’s a different story. Most people who attend church don't grow crops or rear livestock. They earn a cash-based income from their work or investments. 

This post unpacks everything you need to know about tithes and taxes. We’ll examine if tithes are tax deductible and how to claim them on your tax return. We’ll explore the ethical and moral side of taxes and tithes and give you all the information you need to remain compliant with the IRS rules. 

Is Charitable Tithing Tax Deductible?

So, is tithing a tax write off? Yes. Tithes are tax deductible. They count towards your annual deductible expenses on your return when filing your taxes with the IRS. These charitable contributions count as a tax-deductible item, making it worthwhile giving to your church considering the deductible benefits they offer you when you receive your tax return. 

However, there are instances when you might not want to claim tithes as tax deductible expenses when filing your taxes. In some cases, the law requires the taxpayer to report all donations to the IRS. However, you can't claim tithes on your taxes if your church doesn’t have 501(c)(3) tax-exempt organization status.

Some church congregation members may also have a moral or ethical issue with claiming a tithe on their taxes. They might not want to involve the government in their spiritual life or feel that tithes are a personal matter between them and the Lord. 

However, it’s up to the individual to determine if they want to include tithes in their tax responsibilities. The law doesn't require taxpayers to claim tithes when filing during tax season. It’s important to note the IRS rules for tithes and church offerings require you to report these charitable donations in most cases. 

However, that doesn’t mean you have to claim the tithe as a deduction. The Internal Revenue Service requires taxpayers to keep a written receipt of all tithes of $250 or more. The taxpayer must keep this written record from the church to which they offer the tithe. 

The church's Contemporaneous Written Acknowledgment (CWA) must include the amount of the contribution and descriptions of any noncash assets donated. It must also indicate whether you received anything for the tithe and estimate the monetary value. Since tithes give you a spiritual reward, completing this part of the record is unnecessary. 

If your tithe is in the form of a noncash asset donation totaling over $500, the IRS requires you to complete Form 8283 for Noncash Charitable Contributions. Tithes are commonly deducted for tax responsibilities, lowering your taxable income and taxpayer liability to the government. 

Keep in mind that while you must report your tithes, you don’t have to claim them as a tax deduction. So, whether you choose to file your tithes as a deduction determines the impact of your giving on your overall taxable income for the year. 

How to Claim a Tithe as a Deductible when Filing Your Tax Form 

The IRS offers resources on its official website to help taxpayers comply with the tax law and IRS requirements regarding claiming charitable donations when filing their taxes. Tithes count as charitable donations, so it’s important for taxpayers to have a good understanding of these rules and the law before filing. 

Taxpayers must itemize their tithes when completing Schedule A or Form 1040. They must also maintain all documentation of tithes they want to itemize and deduct from their tax responsibility to provide proof of their donations. 

In some instances, this action is as simple as providing a copy of a bank statement showing the transfer of the tithes to the church, reflecting the donation. Here are the steps to follow when claiming tithes as deductions when filing your tax responsibility for the year.

First, gather all relevant documentation, including bank statements, CWAs, and personal receipts of tithes made to the church. These documents are essential to prove your donations and itemize your deductions.  

Next, complete Form 1040 or Schedule A. In this form, you itemize the tithes you want to deduct from your income. When completing the form, be aware of the 60% limit on AGI and don't exceed the threshold. We’ll cover the AGI limits in detail in the next section. 

These are the general steps to consider when completing your deductions for your tax return, but there may be more to consider before filing. If you’re unsure of how to navigate the process, hire a tax consultant to help you prepare the correct paperwork for your tax return and ensure compliance. 

Keep in mind that while Christians can distinguish the difference between charitable offerings, donations, and tithes, the IRS won’t. The IRS only cares that you made financial contributions to an organization with 501(c)(3) tax-exempt status. So, the IRS rules surrounding charitable donations to other tax-exempt organizations are the same as tithes to your church in the eyes of the tax code.

Do Churches Pay Taxes on Fundraising Income & Tithes from Donors?

As a 501(c)(3) tax-exempt organization, qualifying churches must follow specific rules regarding the taxes they pay and don’t pay during the financial year. Most churches don't have to report tithes as income for tax purposes, provided they have the necessary status in the eyes of the IRS.

The rules for these organizations include not using the tithing they receive for political or lobbying purposes. Churches don’t need to report tithes, but the members of the congregation can report their charitable tithing contributions to qualify for tax breaks. Therefore, it’s the responsibility of the church to inform its congregation of this fact.

The church will facilitate its members' tax exemptions and encourage more tithing by providing members with simple receipts or forms to assist with the effective tracking of tithes.

Tax-Deductible Tithing - Limits and Considerations

While the IRS facilitates deductions on tax returns for tithes to a tax-exempt organization, such as a church, limitations apply. Taxpayers may deduct their charitable contributions, including tithes, for the 2023/2024 tax year.

The IRS rules surrounding charitable contribution deductions relating to cash contributions to public charities and foundations are specific. These contributions are limited to 60% of the taxpayer's adjusted gross income (AGI).

So, what is AGI, and how does it relate to tax filing season? Simply, AGI refers to gross income minus specific deductions. It’s a tool the IRS uses to assess taxpayer liability and the amount you owe the government each year for providing services. Understanding how AGI works helps taxpayers determine their taxable income less eligible deductions. 

Deductions are benefits and an amount deducted from your taxable income based on your expenses used to create that income. Tithes qualify as a deduction, according to IRS rules. The taxpayer must claim charitable contributions as itemized deductions using Schedule A of IRS Form 1040. 

There is an annual limit on the charitable cash contributions a taxpayer can make to their church in the form of monthly or annual tithes. This limit is 60% of the taxpayer's AGI for tax years 2023 and 2024. The IRS permits deductions for cash and non-cash-based tithes based on the annual guidelines and rules. 

In other words, if the taxpayer donates 75% of their AGI, they lose out on the 15% above their AGI limit. They may donate up to 60% of AGI and apply the other 15% to their tax return the following year.

Let’s look at an example of how to calculate AGI and deductions. 

After accounting for benefits and salary, Jane determines she has an annual income of $60,000. She pays $12,000 in business expenses, $10,000 to her 401k and healthcare contributions, and $6,000 in tithes to her church. 

To determine her annual deductions, she adds $12,000 + $10,000 + $6,000  = $28,000 total. 

Jane subtracts this figure from her annual income to find her AGI.

$60,000 - $28,000 = $32,000 AGI. 

This figure would be well below the $60,000 threshold of deductions on her annual adjusted gross income. As a result, she can claim deductions for the full amount of her tithing for the year. 

Tax Deduction Limitations - Claiming the Full Tithe or a Portion

It’s better for taxpayers to claim the standard deduction in their filing status if it’s over the total amount of all itemized deductions for the financial year. Otherwise, they’ll pay taxes on more of their income than they need to due to their inability to itemize and claim their standard deduction as well. 

Jane can claim the full amount of her tithes. However, if her tithes increased her deductible expenses above the 60% AGI threshold, she would do better in her tax refund amount if she claimed a portion of her tithes to keep her at the 60% threshold. 

Tithing and Your Taxes - Tax Planning Strategies

Understanding the tax strategies for tithing maximizes your giving impact and the amount you receive in tax breaks on your tax return. Let’s unpack a few common tax strategies and how they relate to tithing and your tax return.

Estate Planning

Naming a fiduciary as a beneficiary in a will, trust, retirement plan, or insurance policy can reduce or eliminate the estate tax for heirs. Therefore, your giving can continue to support the church and grow your legacy.

Long-Term Appreciated Assets

Donating long-term appreciated assets such as real estate, stocks, or bonds to the church as a tithing strategy means you avoid paying capital gains tax on these instruments. Individuals can take a deduction for its full fair-market value or up to 30% of adjusted gross income.

Donor-Advised Funds

Donor-advised funds are accounts dedicated to charitable giving, making you eligible for a tax deduction. Individuals can recommend grants to qualifying churches as tithes and invest these funds to create tax-free growth. 

Can a Business Donate or Tithe Income to a Church?

Companies can tithe a portion of revenue to the church, but it’s unnecessary if management and ownership are already tithing personally. Nothing in tithing law suggests businesses must make a tithing contribution from revenues.

While people own and control businesses, companies are financial entities, not people. Essentially, it’s up to the owners and shareholders to decide whether to make charitable contributions to the church. Many companies have programs that give back to the community, and donating to a local church could be a giving strategy that makes sense for the organization. 

Since a church is a charitable organization, companies can itemize donations and deduct them from tax obligations. Companies can track donations as charitable contributions or business expenses, increasing the tax break.

However, the business must prove it receives a commensurate economic benefit from its donation strategy to demonstrate its advantage to the company. Companies receive more tax breaks, enabling them to increase the amount they give annually as donations to charitable partners, such as churches.

Considerations for Tithing on a Tax Refund​​

Do you tithe off your gross or net income? Do you tithe your tax refund? No specific rule surrounds this practice, but scholars can provide their judgment on the issue. 

If you tithe based on your net income, you aren’t tithing the full amount you earn each year. If you tithe off your gross income, you’re tithing every penny you make. So, when your tax refund arrives, you would tithe it if you were tithing throughout the year based on your net income. You wouldn't tithe your tax refund if you tithe based on your gross income.

The accepted practice is to tithe off your gross income, which includes your benefits such as your 401k, health insurance obligations, travel allowances, and others. This tithing strategy makes for an easier calculation and less confusion about the amount you give to the church annually.

Is Tithing Tax Deductible? - Ethical and Moral Considerations

Tithing a percent of your income is a standard practice across the Christian religion in all denominations of the church. Tithing doesn’t guarantee you a place in God’s Kingdom, but believers think donating a portion of your income to the church is the right thing to do.

Tithing is a part of every Christian’s service obligation to the church. They tithe without expecting to receive anything in return. To live as a Christian means to follow the law of the church and God’s word. In the end, it pays dividends to be on the good side of the church and please God.

However, when we consider how Jesus flipped the tax tables at His Father’s House, many might feel some level of internal conflict regarding the relationship between tax deductions and tithes. While no religious scholar or expert can confirm giving a piece of your income to the church will guarantee you or your family a seat in Heaven, no one can disregard it.

The ethics of tithing and claiming a tax refund on your giving might seem confusing, but it’s a part of living in the modern financial system governed by IRS rules. Stock, cash, and other financial products and instruments weren’t around in Biblical times, but we use these tools to navigate the modern world. 

By claiming receipts for tithing on your tax return, you’re leveraging the efficiency of the tax system, lowering your tax obligation. However, cheating on your tax return to increase the amount you receive on your tax return wouldn't be the Christian thing to do. 

Be honest in your returns and file the right deduction amount. Cheating the IRS might seem like a way to get one over on the tax man. After all, Jesus did not respect the tax collectors of his time. But he did say they could reform and find their way to God’s Word. Do the same with your tax obligations and stay on the right side of the IRS and the Lord.

FAQs - Is Tithing a Tax Write Off?(300)

Q: What happens if you don't offer a tithe to the church?

A: God will not punish you if you don’t tithe your income as an offering to Him. God can’t accept a tithe due to the actions of His Son, Jesus, but He will accept a tithe.

Q: What are the types of tithes?

A: Levitical (sacred) tithes, feast tithes, and poor tithes.

Q: What were Jesus’ Words on the subject of tithing?

A: Jesus said, “Woe unto you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices: mint, dill, and cumin. But you neglect the more important matters of the law: justice, mercy, and faithfulness. You should practice the latter without neglecting the former.”

Q: Is tithing a requirement under religious law?

A: In Genesis 28:22, Jacob committed to tithing to the Lord at Bethel. His practice was later written into the Law. So, tithing is a biblical and spiritual practice preceding the Law, existing apart from the Law. 

Q: What are the benefits of tithing your income to the church?

A: By tithing, God is pleased with your obedience and honored by your faithfulness in his Word. Tithing shows that your priorities lay with God, not with your finances and the lust for wealth. It protects you from selfishness and supports the Great Commission.

Q: Why is tithing a powerful practice for Christians?

A: Tithing your income to God shows the Lord he has control over your heart by valuing Him over money. The practice shows God that his Word and LAw are your top priority, not your finances.

Q: What does God promise his followers if they commit to tithing their income?

A: Deuteronomy 14:23 states that God promises you financial blessings if you honor him with a portion of your income. 

Q: Why did the church start tithing programs?

A: The church started tithing its congregation in New Testament times. The practice came from the belief that Jesus' conversation with a rich man demanded sacrificial giving and generosity. Church leaders like Irenaeus and Clement encouraged the church to receive tithes because Jesus's actions freed them from the laws of the old world.

Conclusion

According to IRS regulations, tithing and charitable donations to churches are tax write-offs. However, taxpayers must follow the IRS requirements when filing for tax deductions on their tithes. 

Religious individuals can donate to the church to show reverence to God without legal and financial issues standing in the way. Tithes are an important fundraising strategy for churches and are highly regarded from a spiritual perspective.

There may be ethical considerations surrounding the nature of charitable giving and tax deductions. However, tithing and taxes are part of living in a modern financial system where the state and taxpayers must balance spiritual service and legal tax obligations to remain compliant with the law and charitable donations.

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