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Here is a great example of how individuals can create community good and gain personal benefit from the Michigan Community Foundations Tax Credit. Lillian Gill is active in her community, and she has interest in supporting several charitable causes. Lillian is seeking maximum tax advantage for her charitable gift.
The Michigan Community Foundations Tax Credit allows individuals to give up to $200 and still receive $100 credited against their Michigan income taxes (couples can receive a credit for up to $200 on a gift of $400).
Lillian recieves a $100 state tax savings via the Michigan tax credit. If Lillian's marginal federal tax is 25 percent, then her original $200 gift (minus the $100 state tax credit) provides a potential federal tax saving of $25 ($100 x .25 = $25). Adding the federal tax reduction to the Michigan tax credit ($25 + $100), Lillian saves $125 in taxes on her gift of $200.
In effect, her gift of $200 only cost her $75, yet the community benefits from her full gift of $200 to her community foundation.
A couple's gift of $400 could cost them as little as $130.
Go to the Michigan Tax Credit Calculator to estimate the cost of your gift. |
