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Level 1
June 5, 2019
Solved

My charitable donations decreased my refund. why?

  • June 5, 2019
  • 5 replies
  • 63 views
When I deducted the $1000 dollars of charitable donations I made this year it decreased my state refund and increased my federal, but my total refund was less when I used them.  I ended up just deleting all my donations, but I don't understand why.  I make donations every year and it has always benefited me.
Best answer by

There comes a point when adding more deductions actually hurts your refund due to reduced credits. Good news is that making charitable deductions are optional not required. Those donations can reduce your taxable income and lower your tax bill. There are certain credits that are affected by your taxable income and if your taxable income is reduced by adding charitable donations that will also reduce income based credits thereby decreasing your refund.

5 replies

Answer
June 5, 2019

There comes a point when adding more deductions actually hurts your refund due to reduced credits. Good news is that making charitable deductions are optional not required. Those donations can reduce your taxable income and lower your tax bill. There are certain credits that are affected by your taxable income and if your taxable income is reduced by adding charitable donations that will also reduce income based credits thereby decreasing your refund.

Level 2
June 5, 2019
htis don't tell me why