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      11-02-2012, 07:17 PM   #21
jphughan
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Quote:
Originally Posted by Spaceman Spiff View Post
It's deducted from taxable income not taxes due so it's still costing them $650K-$700K, assuming they pay U.S. tax of 30-35% and not German 15% tax.
Quote:
Originally Posted by red-sauerkraut View Post
Wrong you are. Maybe take a some tax classes.
Umm, his percentages MAY have been off, but he's absolutely correct on the general facts. Donating $1 million does NOT reduce your taxes by $1 million. It reduces the income on which your taxes are based by $1 million. Items and actions that are tax-deductible aren't free, they're just cheaper than their face value. Otherwise companies would say, "Hmm, I owe $X in taxes this year? Nah, I think rather than paying that, I'll just wipe out my tax bill by donating that amount to charity or spending that amount on other tax-deductible things like investing in the business instead."
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Last edited by jphughan; 11-02-2012 at 09:35 PM.
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