The Joy Of Charity
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TAX CREDIT

Why it's good

By receiving a tax credit for your charity you can both increase the amount you give and increase the money in your pocket.

In addition, the institutions approved as charity recipients by the Israeli tax authority have met the authority's guidelines for financial administration, and therefore provide a measure of confidence that your money will be used for the purposes you intended.

So even if you don't live in Israel or simply are not intending to request a tax credit, you may want to select your recipients from our list.

How it Works

The Israeli tax authority gives a tax credit in the amount of 35% of the donation to any recognized public institution. The following exercise will help to explain how this can increase your charity and the money in your pocket.

Let's suppose you earn $100,000. (Congratulations!)

• The tithe you give to charity will be;
  • $10,000
    10% of 100,000
• At this stage you have in hand;
  • $90,000
• The tax credit you receive will be;
  • $3,500
    35% of 10,000
• The additional tithe to charity will be;
  • $350
    10% of 3,500
• The tax credit you receive will be;
  • $122.50 35% of 35
• At this stage you have in hand;
  • $93,272.50
• The additional tithe to charity will be;
  • $12.25
    10% of 122.50
• At this stage you have in hand;
  • $93,260.25
• The tax credit you receive will be;
  • $4.29
    35% of 12.25
• At this stage you have in hand;
  • $93,264.54

The mathematicians among us will know what is the theoretical limit of this theoretically endless process. However, anyone can easily see that you will have in your pocket approximately $93,264 and will have given to charity approximately $10,362. Before you visited the income tax authorities, you had only $90,000 and had given only $10,000 to charity. Isn't income tax a wonderful thing?

This is just one of God's ways of making rich those who distribute His wealth.

How to Qualify

The following figures were applicable in the year 2001.

1. Give at least 340 shekels to a recognized institution in the course of the fiscal year.
2. You cannot receive additional tax credit in this fiscal year after having received it for contributions in the amount of 30% of your taxable income or 2,000,000 shekels (whichever is lower). However, amounts above the maximum can be credited to the following three years.

Click here for the Hebrew text of the Israeli law regarding tax credit for charitable donations, as well as instructions for requesting the tax credit.

		The Joy Of Charity
new material		www.joyoflife.org.il	about this site