What EXACTLY does "tax deductible" mean?

In accordance with your instruction to pretend that you are 12: Dear 12 year old, Yahoo! answers does not allow anyone under 13 to ask questions her. I believe this is to prevent abuse of this system by child molesters. Please remove your question. This concludes today's session of pretending that you are 12. Here is my real answer: Tax deductible means that if you (1) file and (2) itemize deductions, then your "taxable income" is reduced by the amount of the gift. For example, if $500 was withheld for taxes and your taxable income would have been $1,000 without the gift, then, without the gift, the government would have kept $100 of the $500, so your refund would have been $400, but with the gift, your taxable income would be only $400, so the government would have kept only $40 of the $500, and you would have received a $460 refund. Unless you are married to a person who itemizes, it usually does not make sense to itemize unless you can deduct several thousand dollars. If you are ...  more

For this purpose, "deduct" means to subtract. If you have $600 in tax deductible donations, you will have a percent of that $600 to deduct, not the entire $600. Feel free to call us at 909 297 5721 for any other tax questions, or email me at gary.nakauchi@rdtc.com.  more