Author Topic: Moral decision: EITC  (Read 9186 times)

bdbrooks

  • 5 O'Clock Shadow
  • *
  • Posts: 62
Moral decision: EITC
« on: April 27, 2014, 02:36:49 PM »
My wife and I are adding little mustachians to the family. I have realized if we both max out our HSA's and 401k's (as opposed to tIRA or Roth IRA) we could keep our earned income and AGI low enough to get a hefty Earned Income Credit. However, I am not sure if it is MORALLY right for ME. My wife is particularly conflicted since it is a welfare program (or it at least could be argued that it is).

Let's be clear it is not a questions of ethics. I would never claim something I didn't legally qualify for. I am wondering if there are any other Christians here that would weigh in on how they feel about shifting money around to qualify for the Earned Income Tax Credit (EITC). I would certainly have no objection to taking the EITC if I were contributing a more normal 6%-15%. However, we would be making around $70k, but we would be managing to lower our earned income and AGI to under 35k.

We are only 25 years old. We have a paid for house. We can live on around $25k. We have around 60k in 401k's and Roth IRA's. We have about 35k in cash (emergency fund and saving up for grad school and moving to a bigger house). We are clearly not needing welfare, and we want to make sure we are not morally conflicted with it before claiming it.

If you are NOT a Christian and would like to contribute, go ahead. However, please understand that I am really concerned about a moral issue and not an ethical one. I understand

Clover

  • 5 O'Clock Shadow
  • *
  • Posts: 37
Re: Moral decision: EITC
« Reply #1 on: April 27, 2014, 02:45:16 PM »
Someone correct me if I'm wrong, but I believe you cannot reduce your earned income by contributing to retirement plans.  Retirement plan contributions can reduce your adjusted gross income but not the amount of income you earned.  You will not qualify for the EITC. 

griffin

  • Stubble
  • **
  • Posts: 152
  • Location: Portland, OR
Re: Moral decision: EITC
« Reply #2 on: April 27, 2014, 03:08:51 PM »
Someone correct me if I'm wrong, but I believe you cannot reduce your earned income by contributing to retirement plans.  Retirement plan contributions can reduce your adjusted gross income but not the amount of income you earned.  You will not qualify for the EITC.
Yup, this is indeed the case. You have to earn below a certain amount before deductions. You are also disqualified if you have more than $3,000 in investment income, which may be an issue for many mustachians.

TomTX

  • Magnum Stache
  • ******
  • Posts: 3440
  • Location: Texas
Re: Moral decision: EITC
« Reply #3 on: April 27, 2014, 03:15:05 PM »
Someone correct me if I'm wrong, but I believe you cannot reduce your earned income by contributing to retirement plans.  Retirement plan contributions can reduce your adjusted gross income but not the amount of income you earned.  You will not qualify for the EITC.
Yup, this is indeed the case. You have to earn below a certain amount before deductions. You are also disqualified if you have more than $3,000 in investment income, which may be an issue for many mustachians.

I thought that was the case for something like an IRA, but not for direct payroll deductions such as the OP is describing.

Edit: Link supporting my understanding: http://budgeting.thenest.com/401k-contributions-reduce-earned-income-credit-30084.html
« Last Edit: April 27, 2014, 03:18:51 PM by TomTX »

TLV

  • Bristles
  • ***
  • Posts: 492
  • Age: 31
  • Location: Bellevue, WA
Re: Moral decision: EITC
« Reply #4 on: April 27, 2014, 03:21:47 PM »
If you're trying to look at this from a Christian perspective, I believe the appropriate quotation is "Render unto Caesar the things that are Caesar's." If Caesar's ridiculously complicated tax code says you don't have to pay so much, why pay more? If it would be low enough that your tax is negative, I can understand the moral hesitation there, but if you're still a net tax-payer it wouldn't bother me in the slightest.

Workinghard

  • Pencil Stache
  • ****
  • Posts: 637
Re: Moral decision: EITC
« Reply #5 on: April 27, 2014, 03:45:14 PM »
I have no idea what does and doesn't factor into eligibility for EITC. Having said that, I don't feel it would be morally/spiritually wrong to contribute to a HSA and 401k and then take whatever deduction is legally allowed.

I'm trying to think of a similar situation I might have been in. We had foster children for years and received a subsidy from the state to help with their expenses. We also claimed them as dependents. It was legally allowed but I guess one could argue they weren't our children AND we received financial assistance. I never thought twice about it because it was legal.

Still...if you have a "check" or hesitation than it's probably better not to do it.

ender

  • Magnum Stache
  • ******
  • Posts: 4771
Re: Moral decision: EITC
« Reply #6 on: April 27, 2014, 03:47:58 PM »
Strong evangelical Christian here. Also very interested in the EITC myself. You will find the discussion there more detailed than here on how retirement plans affect your EITC.

First, I want to point out that nothing you said on this as an objection to EITC indicates a Christian reason. None of what you said in your original post is even remotely a uniquely Christian moral argument against EITC.

That being said, the government has laws which provide financial subsidies to encourage different social behavior. Marriage is one of these behaviors. For many people, marriage provides financial benefits (even more so when you have a stay at home parent). Incentivizing retirement planning is another social behavior - self funded retirement - which the government incentivizes. 401k's, IRAs, HSA's among other tools are effectively government subsidies to promote this activity in its citizens.

Children living in a household are another social behavior encouraged by the government. There are a few reasons this can be the case, first it is in the government's best interest for children to be cared for in an organized fashion. A positive population growth rate is also in the government's interest. Tax credits, EITC, extra deductions/exemptions, etc, are all tools the government uses to help incentivize - or at the very least subsidize -  having children.

My point with all this is you are already taking government subsidies for actions other than EITC. If it is not morally appropriate for you to take EITC what makes it more moral for you and your wife to file taxes together or use HSA's/401ks?

Where is the line for "fair" anyways - is it at paying $0 net taxes? how is that any less fair than paying a net income tax (due to refundable credits) or paying 5% net taxes? It's an arbitrary thing you've decided upon.

griffin

  • Stubble
  • **
  • Posts: 152
  • Location: Portland, OR
Re: Moral decision: EITC
« Reply #7 on: April 27, 2014, 03:55:53 PM »

I thought that was the case for something like an IRA, but not for direct payroll deductions such as the OP is describing.

Edit: Link supporting my understanding: http://budgeting.thenest.com/401k-contributions-reduce-earned-income-credit-30084.html
Yup looks like I may be eating my hat here. The IRS calculator asks you to enter "Wages", defined as
Quote
Wages, salaries, tips, and other compensation are reported to you in box 1 of Form W-2. Include in income all amounts reported in box 1 of Form W-2.

Box 1 of your W-2 does not count your 401(k) deductions (so If you make 30k and stashed 15k in your 401k, box 1 would say 15k). I'll leave it up to others to flesh out the ethics of it, but I now agree with Tom that it should be possible to claim it.
Sorry for any confusion - I should've done my research better in the first place :)

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Moral decision: EITC
« Reply #8 on: April 27, 2014, 04:45:40 PM »
Um, it is part of the tax code.  If you are in the giant spanking machine known as the US tax code you grab what you can get because the gubmint will surely do the same to you.

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4731
Re: Moral decision: EITC
« Reply #9 on: April 27, 2014, 05:00:31 PM »

I thought that was the case for something like an IRA, but not for direct payroll deductions such as the OP is describing.

Edit: Link supporting my understanding: http://budgeting.thenest.com/401k-contributions-reduce-earned-income-credit-30084.html
Yup looks like I may be eating my hat here. The IRS calculator asks you to enter "Wages", defined as
Quote
Wages, salaries, tips, and other compensation are reported to you in box 1 of Form W-2. Include in income all amounts reported in box 1 of Form W-2.

Box 1 of your W-2 does not count your 401(k) deductions (so If you make 30k and stashed 15k in your 401k, box 1 would say 15k). I'll leave it up to others to flesh out the ethics of it, but I now agree with Tom that it should be possible to claim it.
Sorry for any confusion - I should've done my research better in the first place :)
Does it bother anyone else that a 401k (an employer benefit) may allow you to access EITC in a way a traditional IRA (a benefit open to all) does not?

beltim

  • Magnum Stache
  • ******
  • Posts: 2833
Re: Moral decision: EITC
« Reply #10 on: April 27, 2014, 05:08:27 PM »
Um, it is part of the tax code.  If you are in the giant spanking machine known as the US tax code you grab what you can get because the gubmint will surely do the same to you.

Nothing like the latest in ethical codes from the 18th century BC.

http://en.wikipedia.org/wiki/Code_of_Hammurabi

Tyler

  • Handlebar Stache
  • *****
  • Posts: 1141
Re: Moral decision: EITC
« Reply #11 on: April 27, 2014, 05:10:48 PM »
Always accept the maximum tax dollars legally owed to you by the government.  If after doing so you feel like you have more than you need, then donate the remainder to a church/charity of your choice.   Your donation will then be tax deductible the next time around, improving your opportunities for giving even more.  And when the money is in your direct control, you'll have a lot more power to make sure it is used to help others in a manner important to you rather than wasted by a faceless bureaucrat. 

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Moral decision: EITC
« Reply #12 on: April 27, 2014, 05:31:12 PM »
Um, it is part of the tax code.  If you are in the giant spanking machine known as the US tax code you grab what you can get because the gubmint will surely do the same to you.

Nothing like the latest in ethical codes from the 18th century BC.

http://en.wikipedia.org/wiki/Code_of_Hammurabi

Meh, the gubmint sets the rules in the tax code.  Since that is the case, I don't understand why anyone would fail to use those rules in whatever way benefits them the most.  If the gubmint don't like it, they can change the rules of the game.

But if OP or anyone else chooses to forgo taking advantage of what is offered to them in a game they are forced to play with no say in the rules, fine by me.  I plan on playing for keeps.

beltim

  • Magnum Stache
  • ******
  • Posts: 2833
Re: Moral decision: EITC
« Reply #13 on: April 27, 2014, 05:41:28 PM »
Um, it is part of the tax code.  If you are in the giant spanking machine known as the US tax code you grab what you can get because the gubmint will surely do the same to you.

Nothing like the latest in ethical codes from the 18th century BC.

http://en.wikipedia.org/wiki/Code_of_Hammurabi

Meh, the gubmint sets the rules in the tax code.  Since that is the case, I don't understand why anyone would fail to use those rules in whatever way benefits them the most.  If the gubmint don't like it, they can change the rules of the game.

But if OP or anyone else chooses to forgo taking advantage of what is offered to them in a game they are forced to play with no say in the rules, fine by me.  I plan on playing for keeps.

Here are some problems with this approach to ethics: it makes slavery ethical in 1864 and not ethical in 1866.  It makes "separate but equal" ethical from 1896-1954 but not ethical afterwards.  It make income taxes ethical after 1913.  It makes requiring health insurance ethical in Massachusetts starting 2006, and in the rest of the United States in 2010.  It makes same-sex marriage ethical in 17 states and unethical in 33 states.

Is this really how you determine your ethics?

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Moral decision: EITC
« Reply #14 on: April 27, 2014, 05:45:12 PM »
Um, it is part of the tax code.  If you are in the giant spanking machine known as the US tax code you grab what you can get because the gubmint will surely do the same to you.

Nothing like the latest in ethical codes from the 18th century BC.

http://en.wikipedia.org/wiki/Code_of_Hammurabi

Meh, the gubmint sets the rules in the tax code.  Since that is the case, I don't understand why anyone would fail to use those rules in whatever way benefits them the most.  If the gubmint don't like it, they can change the rules of the game.

But if OP or anyone else chooses to forgo taking advantage of what is offered to them in a game they are forced to play with no say in the rules, fine by me.  I plan on playing for keeps.

Here are some problems with this approach to ethics: it makes slavery ethical in 1864 and not ethical in 1866.  It makes "separate but equal" ethical from 1896-1954 but not ethical afterwards.  It make income taxes ethical after 1913.  It makes requiring health insurance ethical in Massachusetts starting 2006, and in the rest of the United States in 2010.  It makes same-sex marriage ethical in 17 states and unethical in 33 states.

Is this really how you determine your ethics?

With respect to the tax code?  Of course.  What kind of crack do you like to smoke?   Mint or chocolate flavored?

Obviously slavery is a tad off the track of what we are discussing.

beltim

  • Magnum Stache
  • ******
  • Posts: 2833
Re: Moral decision: EITC
« Reply #15 on: April 27, 2014, 05:50:03 PM »

Is this really how you determine your ethics?

With respect to the tax code?  Of course.  What kind of crack do you like to smoke?   Mint or chocolate flavored?

Obviously slavery is a tad off the track of what we are discussing.

Fine, restricting ourselves to the tax code still leaves income taxes being ethical after 1913 (variably ethical before then), requiring individuals to purchase health insurance ethical only after 2006 in Massachusetts and only after 2010 in the rest of the country, and leaves the ethics of same-sex couples filing their federal income taxes as single or married depending on whether their one of the 17 or one of the 33 states.

Again I ask: is that how you determine your ethics?

Argyle

  • Pencil Stache
  • ****
  • Posts: 909
Re: Moral decision: EITC
« Reply #16 on: April 27, 2014, 06:02:07 PM »
I see why you're concerned and I would be concerned with it myself.  In my own moral code, we have a responsibility to help the poor – Jesus didn't say, "But most of them are spongers and they should be behaving more responsibly so I'm not going to give them any handouts."  I'm not saying that you're saying that, but I know some people argue that many of the poor aren't deserving and therefore the fact that Jesus helped the poor isn't a model for our actions toward our poor.  But “Whoever has two tunics is to share with him who has none, and whoever has food is to do likewise" (Luke 3:11) -- I think that's pretty clear.  There wasn't a footnote with exceptions.

The way I see it, on earth we should be following Jesus's example and acting as his deputies, on his behalf, so to speak.  So it behooves us to support programs that help the poor.  But taking from those resources ourselves depletes the resources available and increases the chances that people might shut down the programs if people who are not poor are exploiting them.  Isn't that the kind of fraud (even when legal) that we deplore?  People would protest, and rightly so, "Those programs aren't helping the real poor, they're just helping whoever can get their hands on the money!"  So we're called upon, I believe, to support the intent behind programs that are meant to help the poor, and not decide that because we can get at that money without being jailed, that's what we should do.

I think if we also consider "Render unto Caesar what is Caesar's," this means that we're called upon to give according to both the letter and the spirit of the law -- no claiming what isn't meant for us because there's a loophole in the tax code.  The Bible speaks in many places about right intentions as well as right actions.  And another way of rephrasing the Golden Rule is the "Universal Imperative" -- what would happen if everyone chose the path I'm contemplating?  If everyone who was not poor went for the tax advantages intended for the poor, that would screw up the system.  I know a lot of people say, "Well, all those other people are gaming the system, so why shouldn't I get some advantages?"  But I think it's clear we're not supposed to do wrong even if everybody else is doing it. 

“If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be. Take care lest there be an unworthy thought in your heart and you say, ‘The seventh year, the year of release is near,’ and your eye look grudgingly on your poor brother, and you give him nothing, and he cry to the Lord against you, and you be guilty of sin. You shall give to him freely, and your heart shall not be grudging when you give to him, because for this the Lord your God will bless you in all your work and in all that you undertake. For there will never cease to be poor in the land. Therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor, in your land." (Deut. 15:7-11).

Those are my thoughts.

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Moral decision: EITC
« Reply #17 on: April 27, 2014, 06:06:00 PM »

Is this really how you determine your ethics?

With respect to the tax code?  Of course.  What kind of crack do you like to smoke?   Mint or chocolate flavored?

Obviously slavery is a tad off the track of what we are discussing.

Fine, restricting ourselves to the tax code still leaves income taxes being ethical after 1913 (variably ethical before then), requiring individuals to purchase health insurance ethical only after 2006 in Massachusetts and only after 2010 in the rest of the country, and leaves the ethics of same-sex couples filing their federal income taxes as single or married depending on whether their one of the 17 or one of the 33 states.

Again I ask: is that how you determine your ethics?

Apparently you like to mix both flavors for a French mint crack-tastic flavor explosion.

Maybe on planet Zorgon you have other options, but here on Earth as a Merkin citizen I have no choice in any of these matters.  If I am not party to the income tax system, gubmint agents will quickly ensure that I am compliant.  As for the rest, not that it matters in the slightest but for the record:

- Gubmint is entitled to tax your income as a condition of citizenship

- I have no problem with requiring everyone to be insured (auto, home, health), although I think we are grossly underserved by not having a single payor system

- I imagine gay married couples are as miserable on average as straight married couples so they might as well get the same tax treatment.

But I have no say in the matter as an individual and no choice but to comply, so this amounts to a series of farts in a hurricane.

avonlea

  • Guest
Re: Moral decision: EITC
« Reply #18 on: April 27, 2014, 06:06:21 PM »
OP, since you are asking about morality, I am guessing that you are wanting to take the spirit of the law into account.

This IRS site describes the EITC, mostly it describes whether or not someone qualifies to receive it.  http://www.irs.gov/uac/Newsroom/Earned-Income-Tax-Credit-Do-I-Qualify
But the first sentence states:
Quote
The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet.

This sentence is vague and could mean different things to different people.  A question you might like to ask yourself is what that means to you.



bdbrooks

  • 5 O'Clock Shadow
  • *
  • Posts: 62
Re: Moral decision: EITC
« Reply #19 on: April 27, 2014, 06:12:39 PM »
I am wondering if there are any other Christians here that would weigh in on how they feel about shifting money around to qualify for the Earned Income Tax Credit (EITC). I would certainly have no objection to taking the EITC if I were contributing a more normal 6%-15%. However, we would be making around $70k, but we would be managing to lower our earned income and AGI to under 35k.

Are you really "shifting money around" to game the system?  If EITC didn't exist, or it had better restrictions that disqualified you from taking it, would you still max out your 401ks and HSAs?  Based on the rest of your comment, it seems like you would since you are living well below your means.  (Great job, btw!)

So what is the alternative?  You are going to put less than you can into your 401ks and HSAs, get hit with unnecessary taxes, and then invest that extra money post-tax -- just so you can avoid taking the EITC?

If it is weighing on you this much, perhaps you could max out your contributions, then donate the EITC to your local food bank or some other worthy cause?  That way you still get your full tax deductions, but the welfare you receive from other taxpayers is given to those truly in need.

My alternative would be Roth IRA's. If we were to max out 401ks, we would not even get ourselves out of the 10% tax bracket. I would rather pay as much of the taxes as possible at 10% as opposed to what I might pay in the future. The EITC essentially adds a 21% marginal tax rate (add another 4% for state EITC) due to being in the phaseout area. So if taking into account the EITC I am at a 35% marginal tax rate. So if I wouldn't be claiming the EITC, the Roth would be a great place to minimize taxes.

As a note for everyone else, my wife is coming around to the idea. Thanks for the wisdom.

bdbrooks

  • 5 O'Clock Shadow
  • *
  • Posts: 62
Re: Moral decision: EITC
« Reply #20 on: April 27, 2014, 06:22:34 PM »
I see why you're concerned and I would be concerned with it myself.  In my own moral code, we have a responsibility to help the poor – Jesus didn't say, "But most of them are spongers and they should be behaving more responsibly so I'm not going to give them any handouts."  I'm not saying that you're saying that, but I know some people argue that many of the poor aren't deserving and therefore the fact that Jesus helped the poor isn't a model for our actions toward our poor.  But “Whoever has two tunics is to share with him who has none, and whoever has food is to do likewise" (Luke 3:11) -- I think that's pretty clear.  There wasn't a footnote with exceptions.

The way I see it, on earth we should be following Jesus's example and acting as his deputies, on his behalf, so to speak.  So it behooves us to support programs that help the poor.  But taking from those resources ourselves depletes the resources available and increases the chances that people might shut down the programs if people who are not poor are exploiting them.  Isn't that the kind of fraud (even when legal) that we deplore?  People would protest, and rightly so, "Those programs aren't helping the real poor, they're just helping whoever can get their hands on the money!"  So we're called upon, I believe, to support the intent behind programs that are meant to help the poor, and not decide that because we can get at that money without being jailed, that's what we should do.

I think if we also consider "Render unto Caesar what is Caesar's," this means that we're called upon to give according to both the letter and the spirit of the law -- no claiming what isn't meant for us because there's a loophole in the tax code.  The Bible speaks in many places about right intentions as well as right actions.  And another way of rephrasing the Golden Rule is the "Universal Imperative" -- what would happen if everyone chose the path I'm contemplating?  If everyone who was not poor went for the tax advantages intended for the poor, that would screw up the system.  I know a lot of people say, "Well, all those other people are gaming the system, so why shouldn't I get some advantages?"  But I think it's clear we're not supposed to do wrong even if everybody else is doing it. 

“If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be. Take care lest there be an unworthy thought in your heart and you say, ‘The seventh year, the year of release is near,’ and your eye look grudgingly on your poor brother, and you give him nothing, and he cry to the Lord against you, and you be guilty of sin. You shall give to him freely, and your heart shall not be grudging when you give to him, because for this the Lord your God will bless you in all your work and in all that you undertake. For there will never cease to be poor in the land. Therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor, in your land." (Deut. 15:7-11).

Those are my thoughts.

My wife and I give pretty generously. We give well past a tithe. If you compare our giving to our spending (so excluding saving), we give about half as much away as we spend. I think the governement does a lousy job at helping the poor. It is the Churches place to help the poor (note that I did not say the church, I said the Church, the body of Christ). Open your eyes to giving and you will find those in need. I feel no obligation to give to the government to help the poor. I feel obligated to give to the government because it is the law and to pay for the services rendered (schools, roads, etc.).

golfer44

  • Stubble
  • **
  • Posts: 195
Re: Moral decision: EITC
« Reply #21 on: April 27, 2014, 06:27:25 PM »
I feel no obligation to give to the government to help the poor. I feel obligated to give to the government because it is the law and to pay for the services rendered (schools, roads, etc.).

Sounds like you answered your own question.

teen persuasion

  • Handlebar Stache
  • *****
  • Posts: 1057
Re: Moral decision: EITC
« Reply #22 on: April 27, 2014, 06:49:57 PM »
We are maxing DH's 401k, and it does mean that we receive EITC.  In fact, we receive more now, with several children out of the house in college, than we did when I was  a SAHM with 5 younger kids at home; the program has expanded over the years.

I don't view EITC as welfare, it is simply part of the tax code.  What about the child tax credit?  Is that welfare, also?  College tax credits?

There are some tax credits that I would like to take advantage of, but ironically our "income" is too low to qualify. At some point in the future conditions or circumstances may change and we might be able to take advantage, or they may be eliminated.  Who knows?

DoubleDown

  • Handlebar Stache
  • *****
  • Posts: 1989
Re: Moral decision: EITC
« Reply #23 on: April 27, 2014, 08:15:45 PM »
I'm Christian, traditional, and opposed to gaming the system to take handouts or things you're not entitled to. I feel 100% there is nothing wrong with you claiming the EITC as described, and the scripture about rendering to Caesar is most apt here. Also scripture about obeying authorities on Earth -- you would be obeying 100% within the laws as they've been designed. I might think it was foolish to pass up this credit, plus as you gain wealth you can help even more people as you see fit.

Nice question though, it's refreshing to see someone concerned about taking advantage of taxes or social programs (I don't mean refreshing for this forum, just society in general)!

Workinghard

  • Pencil Stache
  • ****
  • Posts: 637
Re: Moral decision: EITC
« Reply #24 on: April 28, 2014, 03:56:42 AM »
Always accept the maximum tax dollars legally owed to you by the government.  If after doing so you feel like you have more than you need, then donate the remainder to a church/charity of your choice.   Your donation will then be tax deductible the next time around, improving your opportunities for giving even more.  And when the money is in your direct control, you'll have a lot more power to make sure it is used to help others in a manner important to you rather than wasted by a faceless bureaucrat.

Tyler, this isn't directed at you personally but at the point you brought up.  I don't understand about people, organizations, and charities throwing out tax deduction when talking about contributions. It's only deductible if you itemize and if it's a nonprofit organization as defined by the government. We give over 1k a month and try to live on 2-2.5k a month. We don't itemize and most of our contributions go to help families in need which doesn't count per se.