Why You Should Consider Double Dipping

Why You Should Consider Double Dipping

by on Aug. 17, 2016

Quick! What’s the first image that pops into your head when you hear the term “double dipping”? If you’re a Seinfeld fan, chances are it’s the episode of George being chided for double dipping (i.e., using one chip for multiple dips in the same serving bowl). For those of you too young to remember Seinfeld, first let me offer my condolences and then encourage you to go to YouTube and search “Seinfeld the Chip Dip.” Be prepared for 64 seconds of pure gold. 

The double dipping I’m referring to has nothing to do with chips and dip but rather is considering an expense as a tax deduction and a tax credit at the same time. In the fall of 1999, I started college at Mercer University, pursuing a degree in accounting and finance. It’s hard to believe, but for almost two decades, I’ve taken countless hours of accounting and finance classes, continuing education classes, and professional development classes. And one truth has been hammered into my head over and over again . . . NO DOUBLE DIPPING!!

In almost all cases, double dipping is disallowed by IRS rules. However, there is an exception known as the Exceptional SC Scholarship Fund.

The Exceptional SC Scholarship Fund is a program “made up of tax-deductible donations that serve as scholarships for the private school tuition of exceptional needs students in South Carolina.” (You can read more about the program here.) So, how does this program benefit you? An individual or corporation who pays taxes in South Carolina and contributes to this fund could receive a tax credit to offset up to 60% of their South Carolina state tax liability. In addition to receiving a South Carolina tax credit, you are allowed to deduct the same amount as a charitable donation on your Federal income tax return (as an itemized deduction). Isn’t double dipping fun?!

For those of you who are subject to the dreaded Alternative Minimum Tax (AMT), contributing to this program will most likely reduce your tax bill. That’s because state income tax payments are disallowed for AMT purposes, but charitable donations are allowed. So, by making a contribution to the Exceptional SC Scholarship Fund, you would reduce your state income tax payments and increase your charitable donation. The result . . . a lower AMT bill.

For those not subject to the Alternative Minimum Tax, the program still provides you with an opportunity to make a positive contribution to children with exceptional needs while enjoying a state tax benefit.

For those interested in this program, I would encourage you to contact your tax preparer sooner rather than later. South Carolina grants tax credits only up to $10,000,000, and the program operates on a first-come, first-served basis. As of August 16, 2016, there was approximately $5,600,000 of tax credits left, so act fast because double dipping won’t last forever.”

Why You Should Consider Double Dipping

by on Aug. 17, 2016

Quick! What’s the first image that pops into your head when you hear the term “double dipping”? If you’re a Seinfeld fan, chances are it’s the episode of George being chided for double dipping (i.e., using one chip for multiple dips in the same serving bowl). For those of you too young to remember Seinfeld, first let me offer my condolences and then encourage you to go to YouTube and search “Seinfeld the Chip Dip.” Be prepared for 64 seconds of pure gold. 

The double dipping I’m referring to has nothing to do with chips and dip but rather is considering an expense as a tax deduction and a tax credit at the same time. In the fall of 1999, I started college at Mercer University, pursuing a degree in accounting and finance. It’s hard to believe, but for almost two decades, I’ve taken countless hours of accounting and finance classes, continuing education classes, and professional development classes. And one truth has been hammered into my head over and over again . . . NO DOUBLE DIPPING!!

In almost all cases, double dipping is disallowed by IRS rules. However, there is an exception known as the Exceptional SC Scholarship Fund.

The Exceptional SC Scholarship Fund is a program “made up of tax-deductible donations that serve as scholarships for the private school tuition of exceptional needs students in South Carolina.” (You can read more about the program here.) So, how does this program benefit you? An individual or corporation who pays taxes in South Carolina and contributes to this fund could receive a tax credit to offset up to 60% of their South Carolina state tax liability. In addition to receiving a South Carolina tax credit, you are allowed to deduct the same amount as a charitable donation on your Federal income tax return (as an itemized deduction). Isn’t double dipping fun?!

For those of you who are subject to the dreaded Alternative Minimum Tax (AMT), contributing to this program will most likely reduce your tax bill. That’s because state income tax payments are disallowed for AMT purposes, but charitable donations are allowed. So, by making a contribution to the Exceptional SC Scholarship Fund, you would reduce your state income tax payments and increase your charitable donation. The result . . . a lower AMT bill.

For those not subject to the Alternative Minimum Tax, the program still provides you with an opportunity to make a positive contribution to children with exceptional needs while enjoying a state tax benefit.

For those interested in this program, I would encourage you to contact your tax preparer sooner rather than later. South Carolina grants tax credits only up to $10,000,000, and the program operates on a first-come, first-served basis. As of August 16, 2016, there was approximately $5,600,000 of tax credits left, so act fast because double dipping won’t last forever.”


Why You Should Consider Double Dipping

Next entry

Previous entry

Trust and investment management accounts and services offered by PlanFIRST, an office of the Ronald Blue Trust division of Thrivent Trust Company, are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, nor guaranteed by Thrivent Trust Company or its affiliates, and are subject to investment risk, including possible loss of the principal amount invested.

You are leaving the PlanFIRST website and going to TalkingMoneyRadio.com, an independent website not affiliated with PlanFIRST.