If you are from the US,
Are you from the US, Do you have experience with this? Can you let me know if the calculator I used is in the “ball-park”?
What is the in-hand (net) salary after donations
I am not from the US. I would like to know what is the in-hand salary after donations to Public Charities (PCs). IRS says upto 50% of the salary when given to PCs, is Tax-deductible. If one does the following what in-hand salary is expected? I tried an online calculator and have the results below:
Salary: 300k TC in California (Total Compensation)
Donation: 150k (50%)
In-hand based on Online calculator: 212.6k-150k = 62k$
Salary: 300k TC in California (Total Compensation)
Donation: 200k (>50%, i.e., )
In-hand based on Online calculator: 224k-200k = 24k$
Salary: 60k TC in California
Donation: 6k (10%)
In-hand based on Online calculator: 34.5k
Assumptions on the online calculator:
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9k$ to 401k in all cases (I don’t fully understand how this works but start with 9k)
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13.3% state taxes in California apparently.
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Donations as mentioned above
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300k TC based on --> $150k salary, 15% bonus, $425k stock/4y
That’s great that you are considering giving so much! When people say what percent of their income they are donating, usually they use the pretax income, which is the adjusted gross income (AGI) in the US. This is less than the total compensation because of things like benefits, some contributions to retirement, etc. I am not sure how stock options work, so hopefully someone else can join in on this. Unfortunately your calculator does not tell you the AGI, but you could probably find one that does. It seems to me that the calculator is giving broadly reasonable results. Basically, your net income doesn’t decrease as much as your charity amount because of the tax advantage. It used to be that the maximum you could give with a federal tax advantage was 50% of AGI, but that got changed to 60% a couple years ago. And I’ve read that this year it is actually 100%. Of course even if the tax advantaged limit is 60% of AGI, you could still give more.
I’ve written an entire essay outlining how charitable giving and taxes work. You may find that helpful: https://medium.com/@aaronhamlin/your-guide-to-charitable-giving-and-taxes-a7c0f44c922
IRS says here it is 50-60% for public charities: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search-deductibility-status-codes
I used 13.3% as state income tax for california.
If you have any suggestions for AGI calculators please let me know.
Thanks for the comment, in an otherwise deserted post. :(
I believe the 50% of AGI tax deductible limit refers to donating appreciated stock. Here is one AGI calculator. Here’s a good post on charity and taxes in the US. Aaron Hamlin might be good to contact about how stock from your company is treated.