Most people don't tithe for the tax benefit, but if the tax code will reward you for giving, you might as well take advantage of the tax breaks. If you follow the idea of a tithe where you give without receiving anything in return, the entire tithe is generally deductible. But, that doesn't mean you'll actually receive credit for your contributions when you file your taxes. In addition, only donations to the church or another qualifying charity count. If you make donations to individuals, you can't deduct the donation no matter how needy the person.
Valuing Your Contributions
If you contribute cash, it's easy to value your contribution because your deduction equals the amount of the contribution. If you are contributing items instead of cash, the general rule is you can deduct the fair market value of the items. For example, if you buy food for $50 and donate it to the church food pantry, you can claim a $50 deduction. There are special rules for property that has gone up in value, as well as certain types of property like household items, clothing, cars, boats, and airplanes. For example, you can only claim a deduction for clothing or household items if they are in good used condition or better.
However, if you receive anything in return for your contribution, you must reduce the amount of your contribution by the fair market value of what you receive. For example, say you purchase tickets to a church dinner. Unless that church dinner has an established fair market value, which the organization will tell you, you can't deduct the cost of the ticket. If you purchase an item at an auction that has a fair market value of $50 for $75, with the intent of making a charitable donation, you can deduct the additional $25 you paid.
Deducting Tithes on Taxes
Tithes count as a charitable contribution for income tax purposes, which means you can only claim a deduction if you itemize your deductions instead of taking the standard deduction. Other itemized deductions include mortgage interest, state and local taxes, and medical expenses. In 2018, the standard deduction is $12,000 for single filers, $18,000 for heads of household, and $24,000 for married couples filing jointly. So, unless your itemized deductions, including your tithing, exceed your standard deduction, you won't benefit from your generosity on your taxes.
Restrictions on Total Charitable Deductions
Your total charitable donation can't exceed 50 percent of your adjusted gross income for public charities, which include churches. For example, if your adjusted gross income is $55,000, you can't deduct more than $27,500 in charitable contributions. If you're donating capital gain property, such as appreciated stocks, you're limited to 30 percent of your adjusted gross income. But, if you're over the limit, you can carry forward the excess for up to five years.