Have you ever dreamed of being financially able to give 20, 30, or 50 percent of your income to the Lord? There is a joy and excitement of being able to give more than God is asking us to give. It also provides an encouragement for others to give. Think of all that could be done in Christ’s Kingdom if your church received twice as much in offerings and if foreign missions had twice as much funds. The overhead costs have already been met through present giving. Any additional giving can be directly applied to further the spreading of the Gospel.
There is a way that you can at the minimum double your giving without it costing you any additional money. We get so used to doing things a certain way that our thinking becomes narrowly focused and we do not see the opportunities around us if we do things differently. As I was reading in the Old Testament, I noticed that God commanded the tithe to be given in sheep, cattle, corn, wheat, etc. Today we usually do not give sheep, cows, corn, etc. We first convert the item into cash and then give the money to the Lord. But if we follow God’s command and give the animal or certain other items, instead of the money, we can significantly increase our giving.
Obviously, your church would not appreciate it if you brought four cows to church for your offering. It would create a hassle for your treasurer. The way to handle it is to tell your treasurer that you are giving four cows to the church. The church legally must have the option to keep them or sell them. If the treasurer says to sell them you can take them to an auction and register them in the church’s name. The check is then mailed directly to the church. Your treasurer needs to give you a receipt for the value of the cows. Be careful not to donate a “white elephant” to the church or mission agency that becomes more hassle than it is worth. Offer to take care of selling the item for them so that it is not a burden to them.
This method of giving works best for farmers or those with capital gains property who are selling the animals or capital gains property for income. For animals and capital gains property which you have held for over a year such as stocks, you can claim an itemized deduction at the higher fair market value rather than the lower value of what you paid for it. Business inventory does not work as well because it must be valued at your cost, not at the retail market value. The following two situations illustrates how giving items instead of cash enables you to give two times as much or more to the Lord’s work. This illustration assumes a 15% federal tax bracket. A person in a higher tax bracket would be able to give even more.
A person makes $40,000 and he gives a 10% tithe of $4,000 each year.
A self-employed farmer has the potential to make $40,000. Instead, he donates $8,000 worth of livestock to the church, twice as much tithe as situation A. His income is only $32,000. Because his income is $8,000 less:
He saves on Federal Income taxes:
$1,200 ($8,000 less income, times 15%)
He saves on Social Security:
$1,200 ($8,000 times 15%)
He saves on State income taxes:
$640 ($8,000 times 8%)
He claims an itemized deduction of $8,000 as a non-cash charitable contribution on both federal and state income taxes saving: $1,840 (It may not actually be this much. It assumes other items make up the minimum itemized deductions)
The total savings on taxes is $4,880
The tax savings the person in situation A had in claiming an itemized deduction is $920
The additional amount situation B saves in taxes over situation A $3,960
The tax saving realized in situation B pays for the additional $4, 000 in giving to the Lord’s work! In effect the US tax law allows us to choose which kingdom we want to give our taxes to: Jesus’ kingdom or the US government. This is exciting!
In the 2000 edition of Kiplinger’s Tax Cut computer program, they recommend in the personalized tax planning report as a tax saving tip to give property to charity rather than cash. They use appreciated stock as an example. In addition they say: “What if it’s a good stock and you want to keep it? Simple… take the money you were going to contribute to the charity and buy shares of the stock to replace the shares you donated. That way, your basis in the stock is at the cost of today’s purchase, which will reduce the taxes on your gain when you finally sell those shares.” Note, however, that because you do not pay social security tax on capital gains property you do not save that 15%. However, you are still able to give much more than if you give cash.
The IRS system is set up to tax money income. By not converting our tithe into cash before we give it, we can give much more to the Lord’s work. Giving 20% or more to the Lord’s work is easier than we thought! Check with your accountant for more help on this method of giving.