|
|
Single,
Nonitemizer
|
Married,
Nonitemizer
|
Single,
Itemizer
|
Married,
Itemizer
|
Single,
Itemizer
|
Married,
Itemizer
|
Single,
Itemizer
|
Married,
Itemizer
|
Single,
Itemizer
|
Married,
Itemizer
|
Single,
Itemizer
|
Married,
Itemizer
|
Federal Marginal Income Tax Rate
Amount of Gift
|
N/A
$200
|
N/A
$400
|
15%
$200
|
15%
$400
|
25%
$200
|
25%
$400
|
28%
$200
|
28%
$400
|
33%
$200
|
33%
$400
|
35%
$200
|
35%
$400
|
| |
Impact on State Taxes:
* Amount of gift
x State Tax Credit
= State Tax Savings (Credit)
|
$200
50%
$100
|
$400
50%
$200
|
$200
50%
$100
|
$400
50%
$200
|
$200
50%
$100
|
$400
50%
$200
|
$200
50%
$100
|
$400
50%
$200
|
$200
50%
$100
|
$400
50%
$200
|
$200
50%
$100
|
$400
50%
$200
|
| |
Impact on Federal Taxes:
Amount of gift
Less: State Tax Credit
Net Federal Deduction
x Marginal Federal Tax Rate
= Federal Tax Savings
|
$200
N/A
$0
|
$400
N/A
$0
|
$200
$100
$100
15%
$15
|
$400
$200
$200
15%
$30
|
$200
$100
$100
25%
$25
|
$400
$200
$200
25%
$50
|
$200
$100
$100
28%
$28
|
$400
$200
$200
28%
$56
|
$200
$100
$100
33%
$33
|
$400
$200
$200
33%
$66
|
$200
$100
$100
35%
$35
|
$400
$200
$200
35%
$70
|
| |
Total Tax Savings:
Federal Tax Savings
+ State Tax Savings
= Total Tax Savings
|
$0
$100
$100
|
$0
$200
$200
|
$15
$100
$115
|
$30
$200
$230
|
$25
$100
$125
|
$50
$200
$250
|
$28
$100
$128
|
$56
$200
$256
|
$33
$100
$133
|
$66
$200
$266
|
$35
$100
$135
|
$70
$200
$270
|
| |
Actual Cost of Gift:
Amount of gift
- Total Tax Savings
= Donor's Actual Cost
|
$200
$100
$100
|
$400
$200
$200
|
$200
$115
$85
|
$400
$230
$170
|
$200
$125
$75
|
$400
$250
$150
|
$200
$128
$72
|
$400
$256
$144
|
$200
$133
$67
|
$400
$266
$134
|
$200
$135
$65
|
$400
$270
$130
|
This chart assumes the tax payer would need to claim the Michigan tax credit as income on their federal return in year two; and thus is the net two-year effect of the gift. The credit would only need to be claimed as income if it came back in the form of a check to the tax payer.
* State tax liability must be at least $100 for single, $200 for married persons.
Footnote
- This example assumes the itemizer will need to reduce the amount of the State income tax deduction in the Federal return by the amount of the State Tax Credit.
- This chart was prepared by Clark Hill PLC on behalf of the Council of Michigan Foundations.
- The information is for illustrative purposes only. Check with your tax advisor about your personal circumstances.
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