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sis
02-22-2010, 09:01 PM
Assalamu alaykum wa rahmat Ullah,

A question about the use of tax receipts and the consquential effect of that on the sadaqa...

Someone gives a voluntary sadaqa (not the obligatory zakah) for the sake of Allah, and the charitable organization they donated to sends them a tax receipt. If the tax receipt were applied to a person's tax return, this would lower the possibility of them paying out more taxes, and the government would give them back a percentage of their donation.

Considering the above, does using a tax receipt towards one's tax return take away from the reward of the sadaqa? And more generally, is the person allowed to use the tax receipt or not?

Jazakum Ullahu khayraa.
Wassalamu alaykum wa rahmat Ullahi wa barakatuh.

Abdul Razzaq
02-22-2010, 10:05 PM
Salaam Alaikum

If your intention is for the sadaqa and not the tax break then inshallah you will be rewarded for your intention.

Allah alaam but when you claim it on your taxes you aren't getting a portion back but the gov't doesn't tax you on it so your gross income will be what you earned minus your donation.

So in reality say you have $100 on a paycheck. The gov't takes 30% (withheld from your paycheck) so you are left with $70. If you give $50 in charity and claim that it really means that the gov't should have withheld 30% of $50 ($15 instead of $30) so they would then return the $15 out of the original $30 they withheld from you.

So When you get your $1,000 back don't think it's a rufund (or see it as income) because they arlead took $10,000 out throughout the year they just took too much from you because your total taxable income was less then what your jobs salary was because the gov't allows you to write of thing such as charity, work expenses, education etc and they don't tax you on that.

sadiav
02-23-2010, 03:36 PM
http://forums.almaghrib.org/showthread.php?t=18084

sis
02-23-2010, 07:23 PM
Assalamu alaykum wa rahmat Ullahi wa barakatuh,

Jazakum Ullahu khayran for the clarifications.

I would be interested in learning more about the subject. So, please do post if there's anything you can add.

Dawud Israel
03-05-2010, 07:08 PM
I wasn't sure on this topic but I know a brother who does fund-raising and he said you should take that money from the tax return and then re-donate it again! There are some scenarios where the return is almost 50% so if you have the intention to re-donate it, it could REALLY help the community.

I think this make sense and the ayah came to mind: jaza'u al-ihsani illa al-ihsan - "Is the reward of goodness anything other than goodness?" (55:60)

This is a common issue though. Allahu alaam.