Should you claim your tithes as a tax deduction?
When asked this question, the CPA part of me immediately says –
Absolutely!
Why not?
The government has offered a tax benefit for contributing to the Church…take it!
However, after a deep breath and recollection of Scripture [wooosahh], I get it.
The more we learn about God, the more we understand how much he values our hearts.
Here are a few Scriptures that guide our hearts in giving –
“Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” – 2 Corinthians 9:7
“Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you. – Matthew 6:2-4
Our giving should be cheerful and in secret.
[Read the full passage for context on “secret” giving. The emphasis is to give without seeking an earthly reward, not stealth delivery of your monthly giving.]
Can we truly give cheerfully and secretly if we accept a tax incentive for our gift?
Well, let’s dig deeper into the purpose of a tithe and the purpose of tax deductions. An understanding of these two items will help us get to the answer we are looking for.
What is a tithe?
The direct translation of tithe is “tenth.”
This makes sense because, under Mosaic law, the Israelites were obligated to give the Lord the first fruits, one-tenth, of His provision.
“And every tithe of herds and flocks, every tenth animal of all that pass under the herdsman’s staff, shall be holy to the Lord.” – Leviticus 27:32
Now, if we want to get technical, some Christians argue that the proper term for modern day tithes is “offerings.” The reason is, Jesus fulfilled the Mosaic Law, which means we are no longer required to give a tithe, or one-tenth of our earnings. Instead, scriptures in the New Testament command us to give generously.
Offerings are generous gifts.
An offering could be one-tenth, one-millionth, one-half… whatever is on your heart.
What is a tax deduction?
A tax deduction is an expense the government permits you to deduct against your taxable income.
Let’s say your adjusted gross income (AGI) for the year is $100,0000 and your donations for the year total $20,000.
Since your donations are tax deductible, they will reduce your taxable income to $80,000 ($100,000 – $20,000). As a result, your overall tax liability decreases once your marginal tax rate is applied to your reduced income.
Keep in mind, when it comes to tax deductions, there are two importance item to note:
The Standard Deduction
Every taxpayer gets a standard deduction.
However, in order to be eligible to deduct charitable gifts and other qualifying expenses (also called “itemizing deductions”), those expenses must exceed the standard deduction.
Charitable Deduction Limits
In most tax years, the amount of charitable deductions are limited to a percentage of your adjusted gross income. The limit depends on whether the gift is cash, noncash and what type of qualifying organization received the donation.
Also, charitable donations are only deductible if given to a qualifying organization. Tithes are normally considered “charitable donations” because most Churches meet the definition of a qualifying organization.
Is the Charitable Tax Deduction an Earthly “Reward”?
Yes, reducing your taxable income by your yearly donations is an earthly “reward” from the IRS.
However, a tax incentive is different from the type of reward discussed in Matthew 6:2-4.
In this scripture, the reward includes attention and applause from others. God does not want us to give for the purpose of receiving praise from others.
Instead, God wants us to cheerfully give from the generosity within our hearts.
When we have the right motive to give and happen to receive an earthly reward, God is still pleased.
On the other hand, when we have the wrong motive to give, whether or not we receive a reward, God is not pleased.
It all comes down to what is in our hearts –
“For the Lord sees not as man sees: man looks on the outward appearance, but the Lord looks on the heart.” – 1 Samuel 16:7.
Should you claim your tithes as a tax deduction?
If we focus on the practical aspect of tithing, then yes, we should absolutely claim our tithes as a tax deduction.
When we deduct our tithes, we legally reduce our taxable income, pay less to the government and keep more money in our pockets. With that pocket money, we have additional resources to give generously.
I will say, it is a good idea to examine our hearts with prayer and questions before accepting our tax incentive. Here are some questions to consider –
- Do you tithe solely for the tax deduction? If so, your giving might be more compulsive than generous.
- Do you give to draw attention to how “good you are? Check in on whether you are giving to please man or God.
- Do you have a valid personal conviction that is urging you to refrain from taking the tax deduction? Each of God’s children has a personal relationship with Him. If he has placed a conviction on your heart, then do what you need to do to adhere to His conviction.
I want to emphasize that, an improper heart for giving does not mean we should forego the charitable tax deduction.
For many, taking the tax deduction will not resolve issues in the heart.
Repentance, counsel, and other forms of spiritual discipline might be more appropriate steps to fix the heart.
For those who are still unsure on whether or not taking the tax deduction is the right thing to do, pray, seek counsel, get a better understanding of income taxes, and read the Bible for clarity.
As stated in James 1:5, “If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him.”
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers before engaging in any transaction.
