What is the proper way to calculate Maaser and taxes?

 

Question:

I want to make sure that I am giving Maaser in the correct Halachaic manner, as I am getting conflicting information. I have come across two proposed means of doing so:
Using $200,000 in yearly gross income as an example:
Scenario 1:
$200,0000
-$40,000 in Federal Taxes
=$160,000 in net income
x 20% = $32,000 in tzedakah
Scenario 2:
$200,000
-$32,000 in Federal Taxes (reduced amount taking in consideration the tzedakah given which lowers the taxable income number)
$168,000 in net income
x 20% = $33,600 in tzedakah

 

Scenario 2 is based on what is actually net income, but I found an article on Tzedakah online quoting Rav Moshe Feinstein that seems to suggest that tzedakah should be calculated based on Scenario 1:

An interesting point raised in Rav Moshe’s responsum is the deduction of charitable contributions when computing income tax. Certain governments allow a tax deduction for donating money (or even goods) to charities, which lowers the tax bill. Are we required to give maaser based on the higher amount of post-tax net income which results from taking the tax deduction (since we pay less tax  as a result of  the tax deduction, we are left with a higher net income), or do we compute the maaser based on what would have been a lower amount of net income, assuming no tax deduction? Rav Moshe rules that we need only give the maaser on the lower amount of the post-tax net income, and can take the benefit from the tax deduction allowed for charitable donations (Igros Moshe, Yoreh Deah, vol. I, 143).

My question to you is as to how we hold?

 

Answer:

Maaser is 10% (20% is Chomesh) of the net income. If you receive a credit on the tax, based on your charity donations, then your net income is higher, and masser should be calculated accordingly. Put differently: when receiving credit from the tax department, you must give maaser from this new income.

The online article you quoted has misunderstood the responsum of Reb Moshe. The responsum deals with a different issue, whether one may keep the tax credit or does it belong to tzedaka, because it came about due to tzedaka donations. Reb Moshe rules that one may keep it. Another independent question is whether tzedaka which is given with the purpose to reduce taxes qualifies as maaser. The answer is that it does.

Nonetheless, maaser must be given obviously from this money.

 

Sources:

ראה שו״ת אג״מ יו״ד א קמג. מנח״י ה, לד, ט-יו״ד. (וראה שו״ת אבני ישפה ב יו״ד עז). משנת המשפט ע׳ פה בהערה ריז וריח. שם ע׳ תסח בהערה קפז. וראה צדקה ומשפט ה, הע׳ לו.

 

 

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