Net or Gross Tithing?

[katherine the great]

Also, he shouldn't even have to provide proof as you don't have to provide proof if you donate directly to Salt Lake. I use to do that and the bishop had no idea what I paid.

No one has to provide proof of anything whether we pay to our local ward or Salt Lake. We just look at our year end contribution sheet and tell the Bishop whether we are full, part or non tithe payers. That's it.

[DH]

I know one fellow who pays more than 10% of his gross paycheck. What he does is calculates the value of all the benefits he receives from work (e.g. medical insurance, paid vacation, etc.), adds that amount to his gross paycheck, and pays 10% of that total! While I respect his desire to give, I would not say that's what everybody has to do (in fact, I don't do it myself!).

[Stargazer]

Someone had emailed me and told me that they had told the bishop in a tithing settlement interview that he had donated a full 10% to other charities and I believe he brought some proof of that and the bishop said that was great but none of that would count towards him being considered a tithe payer to the church. So the bishop said unless he ponied up another 10% and to the church, he would not be considered a tithe payer and could not get a temple recommend.

Also, he shouldn't even have to provide proof as you don't have to provide proof if you donate directly to Salt Lake. I use to do that and the bishop had no idea what I paid.

No bishop I have ever had ever did anything other than ask me if the amount in the tithing and donations statement represented full tithes or part. None of them ever asked to see my paystubs or anything like that. A brief meeting, ask what is my tithing status, and boom we're done. I've never had any bishop ever look at the amount of tithing and question whether that was 10% or not. I suppose there may be exceptions in the church, intrusive men who get called to be bishops, and look beyond the mark in carrying out their callings.

Although, in the circumstance you relate, the brother may have been trying to explain why $0 in the tithing column was actually a full tithe. I think I would find it to be more than a little unnerving to baldly state that Zero was Full, unless I were exempt from tithing (and in that case you would give that as your tithing status, instead).

Oh, and there are people who are exempt from paying tithing, such as full-time missionaries.

[thatjimguy]

No matter what, the rich kid came up to Jesus and asked him what he had to do be like him...Jesus responded "Sell everything/Give everything" (Paraphrasing) So before anyone criticizes you or places them above you, they should take a look at perfection's model.

But it is between you and God of how you determine what 10% means, is it gross? net? maybe even after other expenses? Even Joseph said that if you cannot meet your needs, then you owe nothing.

But if you REALLY want to know...use the Holy Spirit to confirm if you are being cheap or not. You'll know soon enough.

[ERayR]

Gross. I get a bigger tax return at the end of the year. In fact, my tax refund cheque amounts to about 60% of my tithing payments for the year...

You are giving the government an interest free loan. You are letting them withhold too much to start with then. I recommend you have less withheld which will result in a larger paycheck.

[mnn727]

cion:

Depends. Do you want blessings based on your net income or gross income?

Thats balderdash, no where in any revelation does it mention anything about it. it says Increase - nothing else, I don't think the governments wasteful spending is my increase, however I do tithe on money used to pay my propety taxes as those things (local schools, roads, fire and police) do benefit me.

[awesome0]

I know one fellow who pays more than 10% of his gross paycheck. What he does is calculates the value of all the benefits he receives from work (e.g. medical insurance, paid vacation, etc.), adds that amount to his gross paycheck, and pays 10% of that total! While I respect his desire to give, I would not say that's what everybody has to do (in fact, I don't do it myself!).

Does he tithe his home production? If so how does one calcuate that value? Does he tithe how he benefits from a progressive tax base (most of our helped out by the richest by for most of benefits which come our way from the government).

This can drive one crazy. I used to think tithing was a commandment we can be exact in and we can conditional on how we define "increase". The question is how we define increase, which is up to us. Take any persons definition of increase, and we can find several arguments for why that doesn't represent their actual increase. I guess that's why its best left between us and the Lord.

[LDSToronto]

Do you pay tithing on your tax return? Just curious. A tax return for me can include an actual reduction in taxes as well as tax credits which can be said to increase my income.

No, I do not pay tithing on my tax return. In the early days of my membership, I would pay tithing on my net pay, and then I would pay tithing on my tax return. However, now that I pay tithing on my gross, I consider my tax refund tithed, and this is just the government paying back what they borrowed from my gross.

H.

[LDSToronto]

You are giving the government an interest free loan. You are letting them withhold too much to start with then. I recommend you have less withheld which will result in a larger paycheck.

I appreciate the advice. I could fill out the forms and have less withheld, but I find that the bulk of my refund comes from RRSP contributions (401K in the USA) and donations.

Also, and this is probably counter-intuitive for all of you who are financially-gifted, I like that the tax refund is like a savings plan. I'm sure there is some completely flawed financial thinking in this, but, hey, it works for me.

H.

[awesome0]

I appreciate the advice. I could fill out the forms and have less withheld, but I find that the bulk of my refund comes from RRSP contributions (401K in the USA) and donations.

Also, and this is probably counter-intuitive for all of you who are financially-gifted, I like that the tax refund is like a savings plan. I'm sure there is some completely flawed financial thinking in this, but, hey, it works for me.

H.

Works for uncle sam too, I am sure he appreciates it

[bluebell]

I appreciate the advice. I could fill out the forms and have less withheld, but I find that the bulk of my refund comes from RRSP contributions (401K in the USA) and donations.

Also, and this is probably counter-intuitive for all of you who are financially-gifted, I like that the tax refund is like a savings plan. I'm sure there is some completely flawed financial thinking in this, but, hey, it works for me.

H.

Our family's the same way. Works for us.

[LeSellers]

this is probably counter-intuitive for all of you who are financially-gifted, I like that the tax refund is like a savings plan. I'm sure there is some completely flawed financial thinking in this, but, hey, it works for me.

Our family's the same way. Works for us.

I am a master credit-management and debt-elimination coach. My job is to show people how to get their houses in order, and there are usually two steps (often, though, three) required to eliminate debt: the first is to get control of your income and money. This lax attitude toward cash flow is one of the hardest things I have to overcome in my clients/students' minds.

If you treat a tax refund like a 0% interest savings account you are just shooting yourself in the financial foot.

The only way to improve a person's financial situation is to change the way he understands money and how to use it. This is not something taught in schools (I have an MBA and a BS in Business

[nicolasconnault]

I think tithing is supposed to be a sacrifice of sorts. If it doesn't hurt a bit, it isn't really a sacrifice. Of course there are always spiritual blessings to be had, but the Lord sends rain to the just and the unjust.

The trouble with money, is that it only really starts to "hurt" when you fall below your threshold of "bare essentials", or your threshold of comfort due to your lifestyle. Some people who earn a lot manage to be very comfortable with a frugal lifestyle, so if they followed your logic they wouldn't feel that they're sacrificing until they're donating all their money up to the point that they start to feel a financial "pinch".

This idea that we're not really sacrificing until we find it hard to give (time, money, efforts etc.) has led some members to feel guilty because they're not finding it hard to meet their Church obligations. Perhaps we should look at "sacrifice" as the whole package of what we give to the Lord, instead of each individual gift (such as tithing). I certainly never struggle to pay tithing, but sometimes I find it hard to choose between my badminton game on Thursday night and going to help a totally inactive member move...

[nicolasconnault]

I am a master credit-management and debt-elimination coach. My job is to show people how to get their houses in order, and there are usually two steps (often, though, three) required to eliminate debt: the first is to get control of your income and money. This lax attitude toward cash flow is one of the hardest things I have to overcome in my clients/students' minds.

If you treat a tax refund like a 0% interest savings account you are just shooting yourself in the financial foot.

The only way to improve a person's financial situation is to change the way he understands money and how to use it. This is not something taught in schools (I have an MBA and a BS in Business

[bluebell]

I am a master credit-management and debt-elimination coach. My job is to show people how to get their houses in order, and there are usually two steps (often, though, three) required to eliminate debt: the first is to get control of your income and money. This lax attitude toward cash flow is one of the hardest things I have to overcome in my clients/students' minds.

If you treat a tax refund like a 0% interest savings account you are just shooting yourself in the financial foot.

The only way to improve a person's financial situation is to change the way he understands money and how to use it. This is not something taught in schools (I have an MBA and a BS in Business

[ERayR]

We're not in debt.

That is wonderful. I hope your home is paid off and you are taking the next step which is investing. Speaking of which would you make an investment that did not make a return on the money invested? Over paying your income tax is just like investing some money and getting no return. The immediate (one year) effect may not be that great but when compounded over 15, 20 or 25 years it can be enormous. Over your lifetime that little interest free loan you made to the government could amount to a $100,000.00. It now becomes serious doesn,t it? Like Lehi I urge you to reevaluate and take the time to fill out the forms. At worst you may owe a little at tax time but if you will put it in a savings account you will have it to pay.

[bluebell]

That is wonderful. I hope your home is paid off and you are taking the next step which is investing.

We are currently renting, and have no extra income at all for investing.

Speaking of which would you make an investment that did not make a return on the money invested? Over paying your income tax is just like investing some money and getting no return.

We don't look at it as an investment, we look at it as a kind of insurance/savings plan.

The immediate (one year) effect may not be that great but when compounded over 15, 20 or 25 years it can be enormous. Over your lifetime that little interest free loan you made to the government could amount to a $100,000.00. It now becomes serious doesn,t it? Like Lehi I urge you to reevaluate and take the time to fill out the forms. At worst you may owe a little at tax time but if you will put it in a savings account you will have it to pay.

I think we'll probably just keep doing what we are doing for now.

[LeSellers]

We are currently renting, and have no extra income at all for investing.

While there are a lot of good reasons to rent rather than buy, there are a lot more to buy rather than rent. For one thing, once the mortgage is paid off, no one (except the county) can kick you out of your house.

A renter is also subject to one thing totally beyond his control: if the landlord fails to pay the mortgage, the new buyer (or even the mortgage holder) can force you out of the house and you will have no recourse: the lease contract will not protect you.

We don't look at it as an investment, we look at it as a kind of insurance/savings plan.

That's not a useful way of approaching the issue. You are making yourselves poorer day by day using this "savings" plan.

It's most definitely not an insurance policy. In California, for example, they are not paying people back the money they have confiscated through withholding because the state does not have the money. (Why the state has no money is a question for another time, but that is the fact.) The state also raised the amount of withholding, meaning each taxpayer has less money to spend for himself, and then it planned on "giving" the money back later, which, as we have seen, it is not doing. If the state goes bankrupt, a definite possibility, the taxpayers will not get any of their money back. Better to have it elsewhere than lose it completely.

Lest anyone think the federal government cannot go bankrupt, that is true, more or less, but it can do something even more devastating: create inflation on a massive scale. It has happened and it will happen again. Giving the government money that's worth $1 today, and getting back 10

[bluebell]

While there are a lot of good reasons to rent rather than buy, there are a lot more to buy rather than rent. For one thing, once the mortgage is paid off, no one (except the county) can kick you out of your house.

A renter is also subject to one thing totally beyond his control: if the landlord fails to pay the mortgage, the new buyer (or even the mortgage holder) can force you out of the house and you will have no recourse: the lease contract will not protect you.

We aren't renting by choice. We'd love to buy but it's not possible for the next few years. Our rent is over a 1000 a month-i'd much rather be putting that into a mortgage.

That's not a useful way of approaching the issue. You are making yourselves poorer day by day using this "savings" plan.

I'm sure that's true theoretically, but i don't believe it's true in reality.

It's most definitely not an insurance policy.

It's an insurance policy to us because it guarantees that we don't owe the government any taxes when everything is settled.

In California, for example, they are not paying people back the money they have confiscated through withholding because the state does not have the money. (Why the state has no money is a question for another time, but that is the fact.) The state also raised the amount of withholding, meaning each taxpayer has less money to spend for himself, and then it planned on "giving" the money back later, which, as we have seen, it is not doing. If the state goes bankrupt, a definite possibility, the taxpayers will not get any of their money back. Better to have it elsewhere than lose it completely.

I don't live in California, and state income taxes are not an issue for us.

Lest anyone think the federal government cannot go bankrupt, that is true, more or less, but it can do something even more devastating: create inflation on a massive scale. It has happened and it will happen again. Giving the government money that's worth $1 today, and getting back 10

[ERayR]

We aren't renting by choice. We'd love to buy but it's not possible for the next few years. Our rent is over a 1000 a month-i'd much rather be putting that into a mortgage.

I'm sure that's true theoretically, but i don't believe it's true in reality.

It is true in reality.

It's an insurance policy to us because it guarantees that we don't owe the government any taxes when everything is settled.

If you don't trust your ability to save the excess I can understand and like any insurance this one comes with a price.

I don't live in California, and state income taxes are not an issue for us.

If that happens, my tax return will be the least of my problems.

I really do appreciate the advice, but it's hard to believe i could do much better without making any changes in my lifestyle when the person telling me that has no idea what my lifestyle is like.

As i understand my lifestyle, the difference between changing my witholdings to less or getting a bigger deductible is negligble.

If we changed our withholdings right now to get less taxes taken out, we would have about 20 more dollars a week. I can't see how saving that in our bank would be worth the risk of us spending it on incidentals. If we were talking about more money, i could probably see your point better.

You understand your habits better than I so I can't argue. I will leave you with one bit of advice I got one time fram a very wealthy man. He said "Take care of the pennies and the dollars will take care of themselves."

[LeSellers]

Our rent is over a 1000 a month-i'd much rather be putting that into a mortgage.

You could be doing so. I know of people with new mortgages who have had bankruptcies and foreclosures. You would most likely qualify.

I'm sure that's true theoretically, but i don't believe it's true in reality.

It is.

It's an insurance policy to us because it guarantees that we don't owe the government any taxes when everything is settled.

You can make that claim, for sure, but it doesn't help you much, all the while being very expensive, as you say below (without acknowledging just how expensive).

I don't live in California, and state income taxes are not an issue for us.

they doubtless will become so. It would be a rare state that does not impose the income tax in the next little while.

If that happens, my tax return will be the least of my problems.

You meant "refund", I'm sure, but while it may not be the most pressing problem, it will be a problem.

Ireally do appreciate the advice, but it's hard to believe i could do much better without making any changes in my lifestyle when the person telling me that has no idea what my lifestyle is like.

More money in your pocket every month without changing how you spend what you already are spending means you will not have to make changes to your lifestyle.

I have done this for seven years, and I have never met anyone with income who has had to make drastic changes in his lifestyle while following my coaching suggestions. Many people have made them anyway, because it makes the debt-elimination process much faster, but it's not because they had to to achieve the goal.

You may be the exception, but I'd have to see it to believe it.

As i understand my lifestyle, the difference between changing my witholdings to less or getting a bigger deductible is negligble.

If we changed our withholdings right now to get less taxes taken out, we would have about 20 more dollars a week. I can't see how saving that in our bank would be worth the risk of us spending it on incidentals. If we were talking about more money, i could probably see your point better.

$20/week * 52 weeks/year = $1,040/year. If you don't want it, I'll gladly take it weekly, and even give it back at the end of the year. That's another rent payment, or the beginning of a nice down payment. While the interest from a savings account would not be a lot (banks are not paying much now), you could use it in any of several other ways that could make a big difference to you.

Besides, for me, I despise government so much that denying them the use of my money is return enough to make it worthwhile without any of the other benefits. Your mileage may vary.

Lehi

[katherine the great]

Sheesh Lehi! You are starting to sound a lttle NOSY! I'm sure that Bluebell and Brother Bluebell are smart enough to know what makes financial sense for their family.

[BookofMormonLuvr]

I would pay on net, then pay 10% of whatever I received back as a tax return.

[PacMan]

This is one topic that I cannot discuss with certain members of my family. The last time, it ended with someone saying "Well, I've been doing it a lot longer than you..." The problem I have for gross payers, is whether or not they tack on the 7.5% that the employer is paying on the payroll tax. My wife has been an independent contractor for years, and it made little sense to pay on gross, which effectively would make us pay additional tithing on account of increased tax liability. Senseless. If at the end of the day I don't have the money in my pocket, it's not interest. And I subtract social security (and should subtract medicare/medicaid, although I don't) because its not going to be anything that will benefit me...considering its going belly-up in the next handful of years.

And just to kill the false doctrine, there's no such thing as getting blessed on 10% gross vs. 10% net. If you pay your tithing, you're blessed 100%. There's no extra-credit.

PacMan

[LeSellers]

Sheesh Lehi! You are starting to sound a lttle NOSY!

"Nosy"? I haven't asked a single question. I don't care about the details.

I'm sure. That Bluebell and Brother Bluebell are smart enough to know what makes financial sense for their family.

Perhaps they do, but my experience (and as I said, I've been doing this for seven years) is that most people, nearly all people, have very little idea about how to manage their finances. That's why I have a job teaching them.

Whether bluebell and hubby know what is best for their family or not is not as obvious as one may like to believe.

Ignorance of fundamental economics and financial information is common: almost no one I know (outside my peers) understands how money really works. The specific, started by H (as I recall), of letting government use money for free, is just one example.

Lehi