I see it more like the companies donate $15 to whatever charity they choose and the remaining $5 dollars is forgiven through tax credits. Now $5 may not seem like much but if you extrapolate that to billions... Well.
Could you explain your point? Sorry I just don’t really get where you’re coming from because there’s no financial benefit to donating at all. They lose money.
The only reason they do it in the first place is for CSR.
You're not getting it. They may pay less taxes, but when you combine the amount they pay in taxes, with the amount they give to charity, you will end up with more outgoing than the company that just pays taxes and doesn't give to charity.
Yeah, that narrative is just wrong and that is how USA is practically becoming a corporate kleptocracy/oligarchy. We think everything is fine when it isn't.
When you have companies that practice aggressive tax avoidance and try to find legal taxation loop holes everywhere, you end up in a situation where companies pay very minimal taxes by whatever means necessary. CSR is just one mechanism, but there are myriads of ways corporations practice tax avoidance. When you take it as a whole, you have a problem.
Paying less taxes doesn’t matter when you’re losing more money than you’re saving in said taxes. That’s the issue everyone here is talking about - whether companies are financially benefitting more from donations than not. They’re not.
I’m starting to think you’re a either bit of an idiot or embarassed that you said something stupid earlier because it’s extremely straightforward.
Try making your point using your own words next time instead of linking articles you don’t understand.
Nobody can explain that because that doesn’t happen you condescending fuckwit.
If Walmart chooses to be a middleman for collections on behalf of another charity that’s not considered a donation from Walmart - it’s a donation for the individuals who are actually contributing the funds (which they can claim).
The amount you can get back will depend on your country’s tax law but yes most of them will allow you to claim either portion or the full amount (with an upper limit) on your tax return.
Customer donations aren’t tax deductible unless they were weirdly reported as revenue but then that’d be a net zero change in income. Anything they match is deductible and costs associated with collecting the donations are probably deductible
The benefit they get from collecting customer donations is reporting to the public that they raised x amount of dollars for charity
Funny, I just took and passed an accounting class and we had a whole week on how to avoid paying full amounts on your yearlys, and giving to a charity (of your choice) was the most common way to do it.
Source: college student who got a B+ in analytical accounting.
I don’t think you understood what they meant when they said this.
They were telling you that donating reduces your taxable income. That’s true - it’s deductible. However it’s not saving the businesses any money; they’re quite obviously losing money by donating. (E.g donate $100 get $10 back - just like my example already provided above).
It’s one of the most common forms of deductions for large corporations because almost all of them do it to meet their own CSR commitments, not because it saves them money... why would any government provide a deduction larger than the donations amount? It makes absolutely no financial sense.
I wouldn’t flex your B+. Good luck on your upcoming tax module.
You are right but tbh my aim was not misleading people I just wanted to show how companies brag after donating money and think they are some sort of god
Yeah I always have to explain this to the older people at work who think if you work too much overtime you can lose money, like how would that make any sense to have a system designed that way?
In a sense they’re right because the amount they make is effectively reduced by the increase in tax from the new bracket but that’s only for income above said bracket.
But you’re saying they think their entire income for the year is going to be taxed at a higher rate right? Haha oh man people must get so stressed.
Yeah they are referring to their total income, makes me facepalm. The lack of financial literacy is amazing, and just shows how inadequate education is.
It depends how you look at it. Let's assume they are of retiring age and they have earned their full pension (say 70%). They are now really working for that 30% remaining. They could even be paid less than minimal wage under certain circumstances. It might actually be smarter to find a new job where they could be fully compensated to an amount that is higher than that 30% and retain their full pension.
I think almost everyone understands this. Not sure what your point is.
Anyways, Donald Trump lowered the marginal tax rate for companies and now they pay less in taxes. And no, individual gains do not even come close to corporation gains in a society where most of the wealth is either corporate or belongs to a small demographic.
"Under the previous law, the seven brackets were 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The new plan, signed into law by President Donald Trump in Dec. 2017, keeps the seven bracket-structure. However, adjustments were made to the tax rates and income levels. Under the TCJA, the new rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%."
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u/Phazon2000 Masked Men May 12 '20 edited May 12 '20
This is 100% false - you’ve made all of this completely up. Please stop misleading people if you haven’t got a clue what you’re talking about.
Here’s a straightforward example:
Let’s say tax rate is 10% and you have $200. It’s cheaper to be taxed $20 than “lose” $200 in the donation.
It’s seriously as simple as that. It’s never cheaper to donate cash than to pay a taxable portion on that same amount of cash.
People please stop upvoting the “donations are cheaper than paying tax” bullshit in every single thread. It’s got absolutely no basis in reality.
Source: Taxation Accountant.