Ma'aser Kesofim (Tithing)

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How Do I Calculate Ma'aser Kesofim (Tithe)?
Page contents:
Calculating ma'aser kesofim
Ma'aser kesofim base
Fiscal period
Offsetting losses against profits
Shortfalls and excess ma'aser kesofim
Deducting expenses
Accounting method
Inflation and taxes
Method of payment of ma'aser kesofim
Disclaimer

   Calculating ma'aser kesofim. Ma'aser kesofim literally means a tenth of money. It is the traditional term for the tithe on money income and is distinguished from agricultural tithes. Below are guidelines for calculating one's ma'aser kesofim obligation.

   Ma'aser kesofim base. The base on which ma'aser kesofim is calculated is one's income including recurring income like wages and ordinary profits, plus non-recurring income such as inheritances and capital gains. One should give tzedakah on his capital. However tzedakah should be calculated on each asset only once, not annually⁽¹⁾. Ma'aser k'sofim must be deducted even if the income is received from one who has already given ma'aser kesofim on those funds. (This is different from agricultural tithing in which case the tithe must be given only once on any given crop.)

   Fiscal period. The Aruch Hashulchan suggests a fiscal period that runs from Rosh Hashana to Rosh Hashana⁽²⁾. Shorter fiscal periods are permissible so long as they remain within the Rosh Hashana to Rosh Hashana period⁽³⁾. Rav Auerbach writes that the fiscal period should be a year and may start on any date that is convenient for the donor⁽⁴⁾.

   Offsetting losses against profits. The donor is permitted to offset losses incurred within the fiscal period against profits earned in that period⁽⁵⁾. Ma'aser kesofim is calculated against the net profit⁽⁶⁾. (Albert, however brings sources that prohibit netting losses in one business against profits in another⁽⁷⁾.) Net losses in any year may not be carried forward to future fiscal periods⁽⁸⁾.

   Shortfalls and excess ma'aser kesofim. At the close of the fiscal period, one should make a final calculation of his or her ma'aser obligation. Any shortfall should be made up immediately. There are authorities who allow excess ma'aser kesofim from one year to be used to meet obligations of subsequent years⁽⁹⁾.

   Deducting expenses. Business expenses including food and lodging while traveling may be deducted from income subject to ma'aser kesofim⁽¹⁰⁾. However, only the amount in excess of costs that would prevail at home may be deducted⁽¹¹⁾. Thus one who spends $25 for lunch on a business trip and would have spent $5 at home, may deduct only $20. Personal expenses necessary for business (e.g., one buys a Rolls Royce to impress potential clients) may be deducted from income subject to ma'aser kesofim if the expense is truly justified for business purposes⁽¹²⁾. Household expenses may not be deducted from income subject to ma'aser kesofim⁽¹³⁾.

   Accounting method Cash or accrual accounting may be used⁽¹⁴⁾. But once the accounting method is chosen, it should be used consistently.

   Inflation and taxes. Rav Moshe Feinstein and Rav Auerbach both hold that one is not obligated in ma'aser kesofim on profits that arise purely from inflation. Thus if the price of one's home increases from $100,000 to $103,000, he or she has a profit of 3% or $3,000. However if the rate of inflation was 2% over the period, the donor may deduct $2,000 from the profit in calculating income subject to ma'aser kesofim. The price index used should be one for necessities only⁽¹⁵⁾. Taxes based on income may be deducted from income subject to maaser kesofim⁽¹⁶⁾. There is a difference of opinion whether other taxes may be deducted⁽¹⁷⁾.

   Method of payment of ma'aser kesofim Ma'aser kesofim may be paid in cash, merchandise, or one's labor⁽¹⁸⁾. In the case of labor, Rav Auerbach points out that ma'aser must be given on the value of the work done. That, is one may deduct only 9/10 of the value of labor against an existing ma'aser obligation; the remaining tenth is not the worker's but is itself ma'aser on the value of the work done. One should value labor at the rate usually charged by the worker. One need not sell merchandise nor borrow to pay ma'aser. Thus if one receives a non-monetary gift, such as furniture or real eatate, the recipient need not sell the gift nor borrow to raise the money to include in the ma'aser fund. However if the merchandise is sold or the recipient has enough cash, ma'aser should be set aside ⁽¹⁹⁾.
   Disclaimer. The information on this page is an introduction to selected topics related to tzedakah. It is designed to help individuals understand the issues and formulate questions. It is not an authoritative guide for practical personal policies with regard to tzedakah. Specific questions should be posed to a competent authority.

   Notes. See Introduction and Summary for full citations of the sources.
1. Ahavat Chesed, chapter 18, Blau p. 104 Return to text
2. Aruch HaShulchan 249.7 Return to text
3. Albert p. 234, Oppenheimer p. 22 Return to text
4. Quoted in Domb p. 20 (Hebrew section) Return to text
5. Blau p. 110 Return to text
6. Aruch HaShulchan 249.7, Albert p. 244 Return to text
7. Albert p. 233 Return to text
8. Albert p. 244, Oppenheimer p. 22 Return to text
9. Ahavat Chesed chapter 18, Blau p. 111, Oppenheimer p. 24 Return to text
10. Aruch HaShulchan 249.7 Return to text
11. Feldberger p. 17 Return to text
12. Albert pp. 230f, Dayan Weiss in Domb, p. 7 (Hebrew section) Return to text
13. Aruch HaShulchan 249.7 Return to text
14. Domb p. 44, Feldberger p. 15 Return to text
15. Albert p. 238, Domb p. 47, 48, Feldberger p. 19 Return to text
16. Blau p. 108 Return to text
17. Domb p. 79 (English section) and p. 20 (Hebrew section), Feldberger p. 23 Return to text
18. Blau p. 111, Auerbach in Domb, p. 20 (Hebrew section) Return to text
19. Auerbach in Domb, p. 20 (Hebrew section) Return to text

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