Tithing is the practice of giving a tenth of your income, typically for supporting a religious institution, such as a church, synagogue or mosque. While most people tithe for religious reasons, you could be rewarded on your income taxes. Whether you follow the technical definition of donating 10 percent, or give a greater or smaller amount to the religion of your choice, your donations count as charitable contributions when it comes to filing your income taxes. But, that doesn’t mean you're guaranteed to get a tax benefit from your tithing.
TL;DR (Too Long; Didn't Read)
If your itemized charitable contributions, including tithes, are more than the standard deduction given by the IRS, you will be able to use them to reduce your tax burden.
Tithes as Charitable Deductions
Contributions of your tithes to your religious institution of choice count as a charitable contribution under the federal tax code. As a result, you can write off the amount of your donations on your tax return. You report your charitable contributions on Line 16 of Schedule A.
However, you can’t deduct your cash contributions in excess of 50 percent of your adjusted gross income. If you contribute appreciated stock, your deductions can’t exceed 30 percent of your adjusted gross income. For the 2018 tax year, the limit for cash contributions increases to 60 percent of your adjusted gross income. If your tithes exceed those limits, you can carry forward the excess for up to five years.
Must Itemize to Claim Tithes
Even though your tithes count as a charitable donation, you can only claim a deduction for charitable contributions if you itemize your deductions. The downside to itemizing your deductions is that you must give up the standard deduction. The amount of the standard deduction varies depending on your filing status, and the amounts go up substantially in 2018. For the 2017 tax year, the standard deduction is $6,300 if you file as single or married filing separately, $9,300 if you’re head of household, or $12,600 if you’re married filing jointly. For 2018, the standard deductions jump to $12,000 for singles and married filing separately, $18,000 for head of household, and $24,000 for married filing jointly.
If the sum of all your itemized deductions, including your tithes, doesn’t exceed your standard deduction, it doesn’t make sense to itemize. As a result, your tithes won’t save you any money on your taxes.
Effective Tax Savings from Tithing
Even if you itemize your deductions so that you can claim your tithes on your taxes, you won’t get your entire tithe back in the form of a tax refund. Instead, you’ll only reduce your taxes by the amount of your tithe, multiplied by your marginal tax rate, which is the tax rate you pay on your last dollar of taxes. For example, say your marginal tax rate is 24 percent and you tithed $6,000. Multiply $6,000 by 0.24 to find that your tithe will save you $1,440.