In theory, tithing is tax-deductible. But whether or not you can do it depends on your tax situation. Tithing comes under the tax deduction category of charitable contributions. That makes it tax-deductible.
But there’s a glitch. It’s only deductible if the amount of your tithe, plus other tax-deductible expenses, exceeds the standard deduction. For 2018, that deduction is $12,000 for single taxpayers, $18,000 for heads of household, and $24,000 if you’re married filing jointly.
The 2018 standard deductions are a lot higher than what they were for previous years. But there’s also a bit of sleight-of-hand. The new standard deductions have been dramatically increased due to the elimination of the personal exemption. The 2018 standard deduction is higher than the combination of the previous standard deduction, plus one or two personal exemptions, that apply for 2017.
But at the same time, the new standard deduction limits are so high that far fewer people will be able to itemize.
To take an example, let’s say you and your spouse earn $100,000 in 2018. During the year, you tithe 10% to your church. That comes to $10,000 per year. But since your standard deduction is now $24,000, there’s an excellent chance you won’t be able to itemize your deductions.
You’ll only be able to do that if your $10,000 tithe – plus other deductible expenses – come to at least $24,000. And even if they do, you might not get the full benefit.
For example, let’s say you have deductible medical expenses, taxes and mortgage interest totaling $18,000. When you add your $10,000 tithe, it gives you a total of $28,000. You’ll be able to itemize your deductions on Schedule A, but the net of all your deductions will be just $4,000 – $24,000 was deductible even if you didn’t itemize.
Under the current tax code, only higher-income taxpayers will be able to fully deduct their tithe.
Let’s look at a couple earning $200,000 per year. They similarly contribute 10% to their church, or $20,000. But because of their higher earnings, and their higher expenses, their other itemized deductions – medical, taxes and mortgage interest – total $28,000. That’s $4,000 higher than the standard deduction. When the $20,000 tithe is added to their itemized deductions, they’ll get the full benefit of the write-off.
That’s why whether or not a tithe is deductible is never certain. With a higher standard deduction, relatively few people will be able to itemize their deductions at all. The most direct tax deduction for tithing will go to higher-income taxpayers, who are more likely to be able to itemize.
But please don’t let this be an obstacle to tithing. For one thing, technically speaking, your tithe is already deductible within the framework of the much higher standard deduction. For another, the tithe is between you and God, and should never be determined by tax deductibility.