Re:Chuck Feeney Is Now Officially Broke
by jedberg on Tuesday September 15, 2020 @03:13PM
(#24485483)
This is a fair point, most people don't understand how tax deductions work.
But yes, I meant your pre-tax income, as all deductions work. Credits apply to taxes directly, deductions always mean pre-tax income.
It’s not being pedantic; this changes the calculus altogether. Deducting from your taxes means you can say “oh well, I have to pay $1M in taxes, I might as well just use that money to make a donation to a charity of my choice and gain some PR instead,” whereas deducting your taxable income means “instead of parting with $1M in tax, I would need to part with $5M in charity to zero out my tax burden,” which is a very different decision and still largely a philanthropic one at some level or the other.