Answer from Humble Bundle: https://support.humblebundle.com/hc/en-us/articles/203894208-Obtaining-A-Purchase-History-For-Tax-Purposes
Edit: I don't know how your taxes work in Denmark, but in the US, if you receive anything in return for your donation, you can only claim a deduction on your donation minus the value of the items you received. The bundle games you receive would be worth more than the donation you gave and therefore none of the donation would be deductible. https://www.irs.gov/uac/eight-tips-for-deducting-charitable-contributions
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So how much now for one year Monthly? It's 132$ and country VAT? Cause it's really unfair.
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usually there is a deal that you get 20usd to humble store wallet if you do annual sub, i got that when i subber for a whole year. Was a good deal, got some from the store i was planned to buy anyway (DLCs so no point to wait for bundle on those) and the games pretty good from the monthlies. iam from EU and it was 132$, no additional cost because of VAT.
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So what's all this thing about taxes. Are there here ot not? I am really confused by this now.
And yeah, I was going to resub annualy (I have already annual plan) and get that 20... it is always $ or it's € if You have € in Your wallet? Cause all prices in Humble Store are in € for me. Only Humble Bundles and Mothlies are in $ for me.
But was thinking about those taxes and was... is it worth? So... why there is no taxes? They said there will make them, so... what's going on? xD
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This thread is about tax deduction when giving to charity.
There was some chatter about taxes when HB "accidentally" added vat when you went to pay for the monthly, but as that is against the law (at least here in EU) they removed it pretty quickly.
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Why is this against the law? I completely get it? Can someone translate it to english? Cause don't know absurd. Really... For me it's super stupid. This doesn't make any sense.
People are discussing about taxes when giving to charity, but there are no taxes, because this is "against the law", even though it's not against the law, as everyone states, cause they all say it's okay, cause it's not charity, when You are getting something in exchange and why even this thing exist if this is against the law?
This all doesn not make any sense. Why would everyone talk about taxes, if there was no taxes?
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This all doesn not make any sense.
That's because you're mixing up two entirely different topics.
This thread is about tax reductions for charitable donations. In some cases when you donate to charity you can claim a tax reduction on the portion of your income that you donated.
The other thread that recently came up here is about Humble adding tax onto the cost of the monthly bundle for EU/UK buyers.This issue has since been resolved and the monthly cost is unchanged.
TL;DR Two different topics, neither of which seem relevant to you as nothing has actually changed with regards to prices/tax.
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But how You can reduce taxes if there is none of them? I'm not mixing because I understand both topics but I'm confused, because If someone wants to reduce taxes, there needs to be taxes in a first place, right?
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The taxes talked about in this thread are the taxes you pay to your government (income tax). In some cases you're allowed a tax reduction for part or the full amount of what you have donated to a charity.
It doesn't work with purchases made from Humble though because you always pay to Humble, which isn't a charity organization, and not directly to a charity. Instead it's Humble that donates to the charities and in turn Humble who may file for tax reductions for it.
I think you're thinking about if a donation to a charity is tax free, as in you don't have to pay any VAT or if you pay VAT you can then deduct that from your taxes, but this is not what's talked about here and as you've noted, Humble doesn't charge any VAT so there's nothing to deduct this way (which still likely wouldn't work either way because of Humble not being a charity by itself).
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Wait... You don't pay VAT to the government? So what is purpose of the VAT, then?
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You are mixing the topics up as the two are entirely different matters.
When you earn money a portion of it is deducted as income tax. When you buy something a portion of that price is also tax, in this case VAT (or whatever your local equivalent is called). In some countries when you make a charitable donation it is possible to claim a tax deduction for that donation. This basically means that your income tax would then be calculated as though you had earned less money that year. This is what was being discussed in this thread.
The other thread that you seemed to be referencing was about the addition of VAT to the cost of the Monthly bundles. This has now been fixed and the bundle cost remains the same as it always was. Tax deductions aren't applicable here as it's VAT and not income tax.
I don't know where you're from so I can't even attempt to give you more specific details. I would however advise doing at least some basic research into the different taxes in your country and how they apply to you as you sound absolutely clueless and that's not a good state to be in when it comes to your money.
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I never heard about income tax. I only have VAT in my country, as far as I know. I assumed those two are the same.
I only heard about tax You have to pay, when You e.g. win a prize in tv quiz, You pay 20% (in my country) to the government. So, if You won a car, You have to pay tax for that car. But this is not a case here, cause... it's not the same thing, is it? It's called tax of enrichment (or whatever I should translate it to...). But usually, You just pay VAT and only that one. We also had some kin of income tax... but we get the deduction, when and only when we.. It's from work. We pay insurances etc. And they count the actual value after a year. Basically each month You pay those things, but they count it so roundly, so after a year, they count more exact value and then if they computed that You paid too much, You got tax deduction. But... I never heard about sth like that, that You buy sth and then it's about charity, so You get tax deduction because of that. Maybe that's the same thing.
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Basically each month You pay those things, but they count it so roundly, so after a year, they count more exact value and then if they computed that You paid too much, You got tax deduction.
Any income tax would be included in these deductions from your wage. I still don't know what country you're in but one of your earlier comments mentions you pay Euro in the Humble Store. There are no countries in the EU that don't have some degree of income tax.
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I completely have no idea how taxes works. i don't even know how exactly those deduction work. And why isn't it just automatically if it works.
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No, the business model of HB is that they are the ones who get to deduct what you pay from their taxes (so yes, if you do 100% donation it's still profit for them)
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tax law does not work that way.
For argument's sake, let's say HB has expenses (salaries, utilities, etc.) of $1 per bundle sold and they're selling a $9 bundle.
Let's say someone pays $3 to the developers, $3 to HB, $3 to charity.
Humble Bundle gets $9, pays $3 to the developers, $3 to charity, and $1 to expenses, leaving a net profit of $2
Now let's say that someone pays $9 for a humble bundle with $9 going to charity.
Humble Bundle has a net loss of $1
When HB does its taxes, it adds those two together ($2 profit less $1 loss) to come up with its total net profit for the year ($1) and pays taxes on that amount.
HB actually loses money when 100% is donated to charity, as it still needs to pay for the costs and infrastructure. From a business perspective, charitable donations reduce profits, and are therefore only justifiable as a marketing / goodwill event. Some businesses build their business model around it, so people specifically choose that business because of the charitable donation, other businesses treat charitable donations as a marketing expense (which it is). And still other businesses donate extra capacity, which costs very little
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HB actually loses money when 100% is donated to charity, as it still needs to pay for the costs and infrastructure
True, but the variable costs and infrastructures are way less than $1 per bundle (the fixed costs are irrelevant, since they would be the same - or higher - without the possibility to donate all to charity). Particularly since the biggest variable expense, the payment processing fee, is deducted from the donation. So it's basically really, really cheap advertising. Which as you point out isn't technically a profit indeed, but is still a win.
Plus, of course I don't have the stats, but I'm pretty sure the mass of people who don't bother adjusting the donation sliders, or those who got converted to the "normal" shop or to the monthly, or even those who increase HB's bar because they mistake it for a charity (it must happen more than we think since HB had to create this FAQ entry), totally makes up for the few who donate 100%.
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I used simplified numbers to explain the matter, not because they were accurate numbers.
nothing you said here changes the fact that Humble doesn't get the deduction. They just get (some) customers because of the charitable donation. No different than brands such as Toms which people buy because of their stated charitable mission
As for adjusting the sliders, plenty of people buy humblebundles without regard to the donations either - they just want the product. In those cases HB is making less than they would if they charged the same amount without the charity portion. that FAQ exists because people have tried to deduct their purchases; it's a mistake to presume it's because people have increased HBs bar because they thought it was a charity, as it's just as likely to be because people have given 100% to charity and wanted a receipt to make a deduction
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No, the business model of HB is that they are the ones who get to deduct what you pay from their taxes
Whilst the details may be wrong I can see where this is coming from. In the UK for example depending on how you make the donation it can be either the charity or the tax payer who receives the deduction.
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that's somewhat misstated. In the U.S. you are obligated to pay taxes on the purchase of any product IF your state has a sales tax 5 states don't have a sales tax
A company is only obligated to collect the sales tax on your behalf if the company has a nexus in your state, otherwise, you're supposed to report it and pay the tax yourself. which I'm sure every upstanding citizen does :p
note: a nexus does not need to be a physical presence, but in practice usually is
Also, it's charity if you did not receive goods or services of comparable value - if you pay $100 for a box of girl scout cookies, technically it's a $96 dollar donation.
sorry for being nitpicky
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IF i set the bar at humblebundle to 100% to charity and then bought a ton of bundles, would i be able to deduct the paid amount from my tax?
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