quote:
Appreciate the support for the Mizzou program. But, you realize the tax brackets are "marginal". Let's say the 52% to 55% bracket change occurs at $750k and your taxable profit is $1M. Then you only pay the 3% increase on the amount above the 52% level or $250k in this case, not the full $1M. Since the increased tax rate is 3% on $250k the "extra" tax is $7.5k not $30k.

So, in your example of $760k with a $10k NIL deduction, you reduce your taxes by $5.5k (since it's all in the 55% bracket), not $30k since the amount below $750k remains in the same bracket(s). You paid $10k to get that deduction, so it cost you $4.5k to give Mizzou a $10k NIL. Awesome donation and much more economical to make it but it is still costing you money to make the donation

This is what I was hinting at. Spending more to get below a marginal tax bracket still costs you more money. Sure you pay less taxes but in the end you still have less money in the bank account.

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Posted by surgicalvenom

Omaha

Member since Jan 2014

5378 posts

Posted on 12/5/23 at 9:57 am to notsince98

You're absolutely correct, but I was using easy to follow math because the actual numbers, methods, exemptions aren't the point. The point is there is a process for regular small business owners to participate. We aren't a bunch of fat cats in some smoky backroom writing checks to buy a football team. But that seems to be the way fans are starting to see NIL.

Yes there are a few "Oil Guys" out there who beat their chest and throw money around. But most of us are regular guys who donate these weird small amounts because it's based on taxes. And it changes every quarter and some quarters there are no donations because the numbers don't work out.

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