The Etiquette of Tithing

Written by Paula Langguth Ryan

I once had a conversation with a subscriber about making a mental shift in how we view tithes. Many people (and I've done it myself!) view tithes as a handout or some sort of charity, which we view negatively, as if needing something is a bad thing. We all have needs, we all have desires. By judging our needs as "bad" we subconsciously block our prosperity in subtle ways.

Likewise we don't quite know what to do if someone refuses a tithe from us, or tithes back to us. This issue, rather than share another success story from a subscriber (keep 'em coming, though -- I enjoy reading about them and will share more in our next issue!), I'm going to share with you a few tips onrepparttar etiquette of tithing, that I've found helpful.

1: Be open and receptive torepparttar 127036 gifts of time, talent and treasures that are offered to you. Tithes, donations, charity, whatever you callrepparttar 127037 blessings of your income, your time or your unique abilities, are acts of good. Charity, being benevolent, means doing good or causing good to be done. Our history is filled with "benefactors" who created trust funds or otherwise supported artists, musicians, composers, writers, teachers, ministers, rabbis, etc. These acts of charity brought attention to and provided support forrepparttar 127038 creative work they were doing. Today, much of this benevolent work is done through tax-deductible charities, but much is also still done through individuals with no thought torepparttar 127039 tax benefit. You participate in this wondrous flow every time you tip a street performer, or throw a house concert, or tithe to other creative individuals.

2: Don't let others take your prosperity away by refusing your tithe (and don't refuse tithes that are offered you). I'm often moved by incredible music. Several weeks ago I tithed directly torepparttar 127040 soloist andrepparttar 127041 pianist (I'm blessed to get to listen torepparttar 127042 incomparable Jazz pianist Stefan Scaggiari) at my home church. They both attempted to turn downrepparttar 127043 tithe and I simply said, "please don't stand in repparttar 127044 way of my prosperity. You fed my soul and I feel compelled to give you this gift. Please accept it graciously inrepparttar 127045 spirit in which it is being given." Simple words that carry a profound message.

I brought in some clothes to a fabulous secondhand store last week and told them that I didn't want to open up a consignment account, I just wanted to give themrepparttar 127046 clothes. The woman was at a loss as to how she could acceptrepparttar 127047 clothes, until I finally told her to takerepparttar 127048 proceeds and give them to a favored charity. Often, people turn down tithes because they are afraid of appearing needy, and because we've had it drummed into our heads that you don't accept charity, or money, for doing good deeds. Doingrepparttar 127049 good deed is supposed to be reward enough. And it is. Accepting a tithe is another good deed.

Karma and the New Millennium

Written by William A. Peyton

According to a new survey carried out by Alliance & where ID_NUM=9270; Leicester, one in five small business owners view tax as their greatest concern. The Chancellor has announced in his last budget that companies with profits below œ10,000 will not have to pay any corporation tax with effect from 1 April 2002. The question to be asked is: does that announcement make incorporation a more attractive option compared to being a sole trader?

The answer is that from a tax point of view, it is advantageous to trade through a limited company as long asrepparttar income is drawn fromrepparttar 127035 company byrepparttar 127036 owners as dividends from their shares andrepparttar 127037 amount of dividends drawn is restricted belowrepparttar 127038 40% band rate (i.e. œ31,063 for tax year 2002/03). That way,repparttar 127039 owners have no further personal tax ("income tax") to pay. Moreover, dividends are not subject to national insurance contributions. This is excellent news of course. But, if dividend income falls withinrepparttar 127040 higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% onrepparttar 127041 excess, which of course will increaserepparttar 127042 tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is whenrepparttar 127043 director takes his reward fromrepparttar 127044 company as salary. Then his/her salary is taxed at income tax rates (like a sole trader's income). That is because, unlike sole traders,repparttar 127045 tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is thatrepparttar 127046 income taxes are higher than corporation tax rates. On top of that, they will be subject to employee and employer national insurance contributions, which of course increaserepparttar 127047 tax burden and render his position worse than even an unincorporated business ("sole trader"), because NIC Class 1 on payroll are higher than NIC Class 2 paid by self employed.

In contrast, a self employed person ("sole trader") is taxed at income tax rates onrepparttar 127048 profits from his business, which are added to his other sources of income. As it has already been mentioned, income tax rates are overall higher than corporation tax rates. On top of income tax, national insurance contributions class 4 are payable onrepparttar 127049 business profits within a specified band (7% on profits between œ4,615and œ30,420). National insurance contributions Class 2 are also paid by self-employed people, although those are lower than those payable by company directors on their salaries.

To illustraterepparttar 127050 above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each inrepparttar 127051 tax year 2002/03. We assume thatrepparttar 127052 company director takes a salary equal torepparttar 127053 amount of his personal allowances (untaxed income) of œ4,615 andrepparttar 127054 balance as dividends. The company will pay corporation tax at 19% equal to œ10,523 and nothing else. The sole trader will pay income tax œ16,542, National insurance Class 2 œ104 and National insurance Class 4 œ1,806. Total œ18,452. The bottom line is thatrepparttar 127055 person that has incorporated his business into a limited company will make a tax saving of œ7,929 compared to a sole trader! Isn't that fantastic?

Somebody might be wondering: why is this entire happening? The official explanation is that, this government, to helprepparttar 127056 economy grow, encourages people to leave as much profits within their businesses to be reinvested, instead of being taken out and spent.

The "unofficial line" is that, as a matter of fact, for yearsrepparttar 127057 Inland Revenue has tried to reclassifyrepparttar 127058 self-employed. The 1% in NIC hike on staff salaries aboverepparttar 127059 NIC threshold from next April adds to bothrepparttar 127060 employees' and employers' tax burden and may more than offsetrepparttar 127061 saving fromrepparttar 127062 corporation tax zero rate onrepparttar 127063 first œ10,000 of profits.

Cont'd on page 2 ==> © 2005
Terms of Use