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Comment by nsxwolf | Hacker News Reader

I know people who do the same thing with charitable donations. They donate to an organization because they "need the tax deduction". Despite that they'd have more money in their pocket if they just didn't make the donation in the first place.

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When most people bring up tax deductions in casual settings it's pretty obvious pretty quickly that they don't really know what a tax deduction is. And the odds quickly approach 1 if they use the phrase "write-off."

It seems to be the common understanding among many that a "write off" of a business expense like a laptop or something means you get that thing for free.

I wonder if this is the result of most people taking the standard deduction instead of itemizing at tax time.

I think it's the result of them probably getting paid a salary out of their business, and the laptop being purchased in December or January makes no difference to their actual take home pay (assuming they're not distributing 100% of profit).

But that being said, a 15-30% discount because you used a different credit card to buy it is a pretty good incentive.

Yes. I know lots of folks living in cheap Midwestern housing who think they're getting a great deal on the mortgage interest rate deduction, but who almost certainly have deductions at or below the standard amount.

I'd venture that a lot of people are typing all this info into their tax software, which summarily throws it all away without them really understanding that that's what's happening.

Regular folks just do not get this stuff and it's silly that we have such a complicated system.

Yeah but the upside of that particularly ignorance is that a charity gets a donation.. Win-win in my book.

They might benefit indirectly from the donation in a way they couldn't by spending the money themselves, while also getting an income tax deduction.

I'm separating the people I'm talking about from people that actually just want to make donations because of the social good. This other group seems to have no interest in making contributions other than their own misunderstanding of what a tax deduction is.

Other than "feeling good" you can't derive personal benefit from a deductible donation.

That's not true. If the donation helps enable a societal outcome that you benefit from (i.e. a donation to a local environmental cleanup nonprofit organization results in a cleaner park for you to enjoy), then you can benefit. You can't derive an exclusive personal benefit from it, of course. If you did, it would be tax fraud.

Depending on how underwithheld you are, you can avoid tax underpayment penalties.

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