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Comment by dilyevsky | Hacker News Reader

If i recall the same happened when google replaced their holiday gift phone with donation to some charities they picked.

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Before it was a gift phone it was $1,000. They changed that in....2008ish maybe. I can't remember the exact year.

2008, it was a T-Mobile G1 which was the first Android phone on the US market.

The year before i joined - 2010 was last one afaik (also when it got leaked)

2009 leaked. Tweeted while most of us were still in line. Still got the screenshot.

<name> One thousand dollar impromptu cash bonus. I work for Google!!

... October 16th. Dumb.

Thanks Randy!

2009 was both. Cash a few months before, N1 right before Christmas.

Not to sound miserly, but how is this a bonus for the employee whatsoever?

The Christmas gift was in addition to the normal annual bonus payed out in January.

Wait what? Who gets the tax break there?

It should be a wash either way unless someone falls into some weird edge case where deductions are limited. The corporation is deducting the payment either way, either as comp paid out to employees or as a charitable donation directly.

That’s probably correct but previously they were also paying your taxes on the gift for you (i know). Since they didn’t share all the details it was hard to figure out if how it played out financially.

I didn’t have a dog in that race bc I couldn’t stand android so I wasn’t even claiming my gift previously but it was interesting to watch the political pickle they got themselves in

If it is a thousand dollar donation, what am I going to do with the tax break? I still have to take a standard deduction. What am I missing?

Majority of goog employees were making high salary in California so very few people in head office were taking standard deduction especially before trumps tax changes

Charity is an above the line deduction.

It wasn't last year, now it is again, so people might've missed it. I thought you could only deduct $300 though.

Are you talking about California state tax? The $300 thing doesn't jive with my federal tax spreadsheet..

No, we're talking federally. There's a $300 federal above-the-line charitable deduction. Everything after that is below the line.

https://www.aarp.org/money/taxes/info-2020/how-to-deduct-202...

Yes, it's limited to $300. So it's not very useful for people significantly more than that but still below the standard deduction.

No it's not. $300 can be an above-the-line deduction. Any donation beyond that is below the line.

https://www.aarp.org/money/taxes/info-2020/how-to-deduct-202...

You didn’t get the deduction. It was just a way to direct company funds.

They didn’t share the details but most likely the company. The donation was “on behalf of all employees”

Obliquely relevant question: can U.S. sole proprietors make expensed charitable contributions? I'm guessing not, because that would decrease the 13.5% Social Security "contribution", and would be on top of the "standard deduction" that was increased to make Schedule A itemization preferable only in exceptional cases.

I don't know anything about sole trader taxation but corporations can make charitable donations that are treated as business expenses (hence not taxed). They pretty much have to be cash, not in-kind contributions though. Ianaa, etc.

If I recall correctly, the employees just picked a charity and Google gave the donation. The "gift" was being able to pick the charity. I don't think there was any employee tax break.

Well the employee doesn't have to pay income tax or payroll tax on the money, so in that sense there is a tax break compared to if the money was given to the employee.

Not a tax break for the employee, since the net effect is still less money. Unless you consider losing your job and having no salary to tax also a tax break.

It’s not “still less money” compared with the situation where the employee gets the money AND donates the money. Of course if the employee was not going to keep the money not getting it is a net loss.

People were mainly just annoyed that rather than getting a free phone or some cash as a gift, they instead got the ability to choose a charity to receive a donation from Google (which has "value" but not monetary or physical value to the employee). The expected to receive a phone/cash so it felt like less compensation/bonus when they didn't receive it.

I doubt anyone was thinking about donation related tax breaks or anything like that. It was simply "sure I will have Google give $500 to this food bank, but why don't I get a new phone or cash bonus?"

Yeah, it depends on what situation you're comparing against.

If you're comparing against the employee getting a gift and keeping it, then yes, the employee was better off before.

But you're comparing against an employee who was previously donating the gift and getting a tax deduction on that donation, the employee is better off now.

When you make a charitable donation of cash, you get a tax deduction to undo the income tax you paid when you originally got that cash. If a company directly donates to charity, you don't pay income tax on that money in the first place, so you don't need a deduction to undo it.

The end result is the same $0 net change in your bank account balance.

Also, companies can deduct all expenses from corporate income tax. So if a company pays you money via payroll, or pays that money directly to a charity,t he company will deduct it from corporate income tax either way.

The benefit of a company making charitable donations directly is that payroll taxes are avoided (not to be confused with income taxes). Both the employee and the company benefit from this, because normally both the employee and the company pay payroll taxes.

"The Human Fund"

- since Festivus 201X

And then the accountants probably tabulated them as corporate donations. So were they gifts from the employee or not?

If you make a donation in someone's name, you get the tax deduction, not them. Google couldn't "pay" the employees in some non-taxable form and then let the employees take the $1000 deduction even if they wanted to (which they don't).

That’s my point. The donation is financially a corporate donation, but is being marketed to the employee as a perk of their employment. That it’s “their” donation.

The perk is your charity gets the money, the point of giving to charity isn't the tax benefits...

Again yes, that’s exactly my point. They are double dipping on the good will; first as an employee perk, second on their corporate annual reports.

If I care about cause XYZ and as part of my employment, my company gives $1000 to a charity that I picked which supports cause XYZ, that absolutely has value to me.

Bonuses to employees are compensation, so tax deductible to the corporation just like a charitable donation.

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