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What's the charitable deduction worth to you? If you itemize your deductions at tax time, the deduction you get for donating to charities can considerably lower the after-tax cost of your gift. The charts below will give you an estimate of how much you will save. They reflect 2003 tax rates. The value of a deduction depends on your "marginal tax rate." This is the tax rate you pay on every extra dollar you earn above a certain amount. For example, if you earn $60,000 a year, your marginal tax rate is 25%. For every extra $100 you earn, you pay $25.00 in extra federal tax. For every $100 you give to charity, you pay $25.00 less in federal tax. To this amount you add the percentage you pay in state income tax. The average is 6%. Your charitable deductions are "generally limited to 50% of your adjusted gross income, but in some cases 20% and 30% limits may apply," according to the IRS. For more details, you can read the IRS publication about charitable giving at: www.irs.gov/pub/irs-pdf/p526.pdf.
* State Income
Tax, 2001:
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