so they can pay even lower taxes subsidized by you
That… isn’t how it works. It’s a very common misconception.
If you pay a store $5, they pay some amount of income tax on that. If you pay them $5 plus an extra $2 for a donation, they can deduct income tax on the $2, but they still owe the same amount of tax on the $5.
It’s the same for personal income tax. If you earn $1000 and make a $100 tax-deductible donation, you can only deduct tax on the donation. Essentially you’d be taxed as if you only earned $900. You still owe the exact same amount of tax on the $900 though.
They can’t deduct the $2 donation if you made the donation at POS. It doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
t doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
Ahh, I didn’t know this! Thanks for the info. It means the “companies just want you to donate at checkout so they get a tax writeoff” thing that people keep saying is even less true. That viewpoint is so prevalent and I’m not sure why - I guess there’s a lot of people that don’t understand how taxes work.
That… isn’t how it works. It’s a very common misconception.
If you pay a store $5, they pay some amount of income tax on that. If you pay them $5 plus an extra $2 for a donation, they can deduct income tax on the $2, but they still owe the same amount of tax on the $5.
It’s the same for personal income tax. If you earn $1000 and make a $100 tax-deductible donation, you can only deduct tax on the donation. Essentially you’d be taxed as if you only earned $900. You still owe the exact same amount of tax on the $900 though.
They can’t deduct the $2 donation if you made the donation at POS. It doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
https://apnews.com/article/fact-checking-000329849244
Ahh, I didn’t know this! Thanks for the info. It means the “companies just want you to donate at checkout so they get a tax writeoff” thing that people keep saying is even less true. That viewpoint is so prevalent and I’m not sure why - I guess there’s a lot of people that don’t understand how taxes work.