Tithing: Pre-tax or After tax? Gross v. Net?


nimrod
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I couldn't find my answer in the Tithing Section, so I'm asking it here:

A ward member gave a talk in Sacrament Mtg sunday on tithing. Twice, he said in the talk, that "you are not a full tithe payer unless you pay on your gross income." He also said, (twice) that "you are not a full tithe payer unless you pay on pre-tax income."

I'm not trying to skimp the Lord here but I want people to make accurate statements, especially in sacrament meeting. As I know it, we are commanded to pay 10% of our interest (increase) annually. I don't think the Church has defined it as Gross, Net, Pre-tax, etc.

Please indicate if I am wrong. Before giving an "opinion" on tithing, please indicate if you have a source that answers this question directly. :D

(I know that IF you pay on your net, you need to pay on your tax return, but if you pay on your Gross, you do not need to pay on your return.)

I bring this up, because a blanket application of "Gross Income" cannot be applied well across the board (self employed, sole proprietorship, investment income, etc) Also, what are your thoughts on paying pre-tax when wealthy people pay 70% tax and poor people pay zero to 5% tax (not right now, but it has been like this) AND, depending on how you answer this question, should one pay tithing on your "cash for clunkers" benefit/rebate? Disclaimer: I agree that people SHOULD/can pay as much to the Lord as they can. I just want true doctrine/teachings to be disseminated.

Edited by nimrod
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I don't think there's any official clarification.

(personal opinion coming:)

Me, I pay on gross. I'd watch the tax refund issue, though. If you wind up getting more in tax refunds than you actually paid (which is entirely possible, given certain income levels and certain refundable tax credits) - IMHO, that's "income" and should be tithed.

Also, what are your thoughts on paying pre-tax when wealthy people pay 70% tax and poor people pay zero to 5% tax (not right now, but it has been like this)

I'm not sure it's particularly relevant. Tax is tax, tithing is tithing, and payments of one are not applicable towards amounts owing on the other.

AND, depending on how you answer this question, should one pay tithing on your "cash for clunkers" benefit/rebate?

IMHO: No; because it isn't "increase"--you already owned the car (which you presumably purchased years ago with post-tithing funds), and when you got the rebate you lost the car.

I bring this up, because a blanket application of "Gross Income" cannot be applied well across the board (self employed, sole proprietorship, investment income, etc.

My law firm is set up as an LLC. I only pay tithing on the amounts I actually pay myself out of the LLC's surplus. However, at some point twenty or thirty years down the road I'll retire and sell off my practice, and at that point I anticipate tithing 10% of the proceeds of the sale.

Edited by Just_A_Guy
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Guest missingsomething

I had a member tell me that I benefit from the taxes that I pay into the government even though its not an "increase" to me.... Im NOT saying I buy into this.

Most bishops do not ask you how you are paying... gross or net then off tax return.... they just ask if you are paying a full tithe (because many believe it also includes your time, talents and services as well)... the reason is because this is something PERSONAL between you and the Lord.

And my person motto is... if in doubt... pay it... afterall.... are you really gonna loose out for paying extra? Wont the Lord reward you for that? But you have to pray for that and do what is best for you. I used to pay on net then pay on my income tax return. Now I pay on gross... so my tax return is mine mine mine :)

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And, my take is a little different. Tithing is supposed to be on your 'increase'. So, what is the definition of increase? I have seen numerous, including one that said increase is that which was left over after you had paid for all you had to pay for to live reasonably. Meaning, after home, food, etc, was dealt with. I dunno about that for myself. I pay on my take home. I pay on my income tax, if I get one. And, I have no doubt I am a full tithe payer, for what it is worth.

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For the purposes of discussion. If tithing is paid on the gross amount of ones income through out life. Then when one retires and starts drawing social security, do they continue to pay tithing on the gross amount of their social security?

If one pays tithing on the net amount of ones income throught life, when one retires and starts drawing social securiy do they continue to pay tithing on the net amount of their social security?

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If one pays on simply the net amount of their income, it is possible they may not be paying a full tithing. This is how it could happen. If one were working a place of business where they were allowed to buy merchandise and have it deducted from their paycheck? EG: Dillards, Autoparts,etc.. They would in fact not be paying tithing on those items that were purchased thru payroll deduction. The same could be true for 401k deductions or other similiar retirement or savings plans.

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All it says in the handbook is pay 1/10 of one increase annually. If you pay net, anything that is interest, bonds, taxed, stocks, or other type of income is derived from for income source, whether it be monthly or annually, this is still tithed as a tenth.

Now, the aspect of tithing for my view, is who money is it in the first place? Not mine but the Lords. When ever a church leader asks for money, I do not hesitate in giving and will ask, how much do you need. For those who accepted their temple covenants, should be living the Law of Consecration

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What is the purpose of paying a tithe? Why does the Lord ask us to do this in the first place? What is the money used for?

As you answer these questions, the definition of a full tithe may be easier to reach. The purpose of paying a tithe is not only to provide financial resources for the Church, but to show humility, gratitude, and a giving spirit for what the Lord has given us throughout our lives. We cannot even claim to own the air we breathe, so what matter is it to give a tenth of our increase back to a generous God?

Just as with other commandments, the real purpose is based upon spiritual needs and spiritual growth. The temporal benefits come to us because we live in a temporal world...right now. The spiritual benefits likely won't be fully realized until we move beyond this life and remember all the truths we knew before we came here.

Why does the Lord ask this of us, and what would he want to give us in return for our obedience?

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All it says in the handbook is pay 1/10 of one increase annually. If you pay net, anything that is interest, bonds, taxed, stocks, or other type of income is derived from for income source, whether it be monthly or annually, this is still tithed as a tenth.

Now, the aspect of tithing for my view, is who money is it in the first place? Not mine but the Lords. When ever a church leader asks for money, I do not hesitate in giving and will ask, how much do you need. For those who accepted their temple covenants, should be living the Law of Consecration

;

Hemi: Therein lies the answer and I am in total agreement. Folks sometimes get into splitting hairs with the Lords money. When the right answer is simply live up to the Temple Covenants you have already made. Practice the Law of Consecration and the worries are over. ;)

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Perhaps if we pay a little more, like 12% of our gross then we can be sure we don't come up short. I don't want to get burned at the second coming.

With all due respect, if I'm living a telestial life I don't think tithing alone is going to save me. If I'm living a terrestrial life, I don't think the mere failure to pay tithing is going to get me burned either.

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Guest Utahrulzz

12% isn't a bad idea. Afterall, think of all the good the tithing money is doing around the world! There was an editorial in the Salt Lake Tribune not long ago about the Church spending "tithing" dollars on malls, some people just don't understand how The Lord works.

Thank You!

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Why isn't taxes considered an expense like all the others we have? Just because it's taken out of our checks doesn't mean that wasn't our money to begin with. When I had my own business, I had to figure out how much I OWED on what I MADE through out the year. Everything about that reeks of an expense. So why wouldn't we pay tithing on that money? We don't pay tithing on our money after all the other expenses in our life, so why taxes?

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Why isn't taxes considered an expense like all the others we have? Just because it's taken out of our checks doesn't mean that wasn't our money to begin with. When I had my own business, I had to figure out how much I OWED on what I MADE through out the year. Everything about that reeks of an expense. So why wouldn't we pay tithing on that money? We don't pay tithing on our money after all the other expenses in our life, so why taxes?

Good point. Some people argue that it isn't an expense because we benefit from roads and such that the government does for us. But then again, a lot of money goes for transfer payment to other people like social security and medicare so we don't benefit, they do. I would dare say a high percentage of it goes to other people.

It is all very confusing and very personal. That is why I try and go a little beyond the minimum to make sure I don't burn.

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Good point. Some people argue that it isn't an expense because we benefit from roads and such that the government does for us. But then again, a lot of money goes for transfer payment to other people like social security and medicare so we don't benefit, they do. I would dare say a high percentage of it goes to other people.

It is all very confusing and very personal. That is why I try and go a little beyond the minimum to make sure I don't burn.

We usually benefit from our expenses. If i had to pay a home owners association due, I'd benefit that much like I do from taxes, but it's still an expense. An other thing that assures me that gross is the way to go is when I think about how the tax rate can fluctuate within the same tax bracket when new tax law is passed. If I'm making the same amount of money, why should Uncle Sam's laws affect how much I give the Lord? It shouldn't matter at all.

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