5 Mar
2001
5 Mar
'01
12:28 a.m.
Now, I'm not a tax expert, but I've done my own for a long time, and it's not
very complicated ... If your total (FED + Sate + Local) tax burden, less FICA,
is on the order of 50% then a $100 writeoff is equivalent to a $50 credit, since
what you can deduct from one is normally deductible from the others. That's
quite a bit, if you ask me, particularly when you're allowed to write off the
entire cash basis, less depreciation, that you hve in the thing. If it's a
minicomputer that you bought to run your business, at, say $80,000 and you've
not depreciated the entire amount, then whatever you didn't depreciate out of
its initial value, plus whatever you've invested (but not in maintenance, since
that's separately deductible), is what you can write off now. Sometimes that's
quite a bit, depending on the situation.
Dick
----- Original Message -----
From: "Wayne M. Smith" <wmsmith(a)earthlink.net>
To: <classiccmp(a)classiccmp.org>
Sent: Monday, March 05, 2001 12:48 AM
Subject: Re: Us vs. Museums
> Also,
people have a misconception of how useful a
tax deduction really is.
> Even a $1,000 donation only amounts to a few
dollars back on their return.
> I'm going to check with my tax guy and
find out how
much a donation
> deduction means on the bottom line (unless
someone
here knows this). It'd
> be nice to have a baseline figure so that
you could
just offer the
> equivalent cash to anyone wanting to donate
something but is considering
> the tax break. Cash is immediate and
under-the-table :)
Well, with a few caveats, it should be your marginal
tax rate (your
'bracket') times the valuation of the
donation. For
example, your $1000
donation should bring you a $280 tax deduction if
you
are in the 28%
bracket.
- don
37.3% if you are also in CA in the 9.3% state bracket
(and it doesn't take much to get there).
Highest possible tax benefit would seem to be a (rich)
person living in CA in the 39.6% federal and 9.3% state
brackets - $489 returned for every $1000 donated.