Will and Jada Pinkett Smith charity closes down after decreasing donations post-Oscar slap - eviltoast
    • jeffw@lemmy.worldOPM
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      7 months ago

      They actually are just making shit up, just ignore them (or read all their comments for shits and giggles, but they have no idea what they are talking about)

    • Kecessa@sh.itjust.works
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      7 months ago

      No, that’s the exact scenario I covered.

      The tax rebate you get is equal to the taxes you paid when the money was paid to you by your employer, you don’t get 100k back from the government by sending 100k to a charity!

      Ok, let me do it again real slow.

      Your employer pays you 200k/year, you pay 50k in taxes total, it’s deducted on every paycheck you get. At the end of the year there’s 150k left in your pockets.

      Over the year you donate 100k to a charity, that reduces your total income from 200k to 100k, so what you owe in taxes is 20k instead (taxation isn’t a fixed %, it increases with your income so in NY you pay about 20k for 100k in total income and about 50k for 200k in total income) but you still paid taxes every two weeks based on your 200k salary, so you have 50k in your pockets at the end of the year (200k - 50k taxes - 100k donation).

      Come tax season the government sends you a 30k check to compensate for the extra taxes that you paid, you have 80k left in your pockets after tax season (200k - 50k taxes - 100k donation + 30k tax rebate to compensate for the donation).

      If the charity is yours and it pays you 100k the government adds it to your total income. So now you have 300k in total gross income and 100k in donations, so you’re taxed based on having made 200k in total that year after adjusting for tax deductible spendings (200k in base salary - 100k for the donation + 100k in extra salary from the donation coming back to you).

      That’s 50k in taxes, you have 150k in your pockets, you just went the long way round to end up with the same thing.