Do You Tithe on Birthday Money and Other Gifts?

Tithing, the practice of giving a portion of one’s income, often to a religious organization or charitable cause, is a deeply rooted tradition. While calculating tithing on regular earned income is straightforward, questions frequently arise regarding irregular or gifted funds. Understanding whether to include funds like birthday money in tithing calculations requires clarity.

Core Principles of Tithing

Tithing refers to contributing a tenth, or 10%, of one’s “increase” or “income.” This practice is found across various religious traditions and is seen as an expression of gratitude, a demonstration of faith, or a means of supporting a religious community’s mission and outreach. The concept reflects a belief in stewardship, acknowledging a higher power as provider.

Motivations for tithing include expressing appreciation for blessings and prioritizing spiritual matters over material wealth. Many view it as a way to demonstrate trust in divine provision and align financial habits with spiritual beliefs. Tithing funds often support clergy, maintain facilities, fund charitable programs, and advance community initiatives.

The definition of “increase” or “income” for tithing varies among individuals and religious communities. Some interpret it as gross income, others as net income after taxes and essential living expenses. Other perspectives define “increase” as only the surplus beyond necessities. Despite these interpretations, the principle remains giving a portion of financial gains.

Tithing on Gifts and Other Non-Regular Income

The question of whether to tithe on gifts, such as birthday money, often stems from how such funds are categorized. From a tax perspective, money received as a gift is generally not considered taxable income to the recipient. Instead, any potential gift tax liability typically falls upon the giver, and only if the gift amount exceeds a substantial annual exclusion. This means that birthday money, in most cases, is treated as a transfer of existing wealth rather than newly generated income for the recipient.

This financial distinction leads to differing viewpoints on tithing. Some individuals choose not to tithe on gifts, reasoning the money may have already been tithed by the giver or represents a transfer of capital rather than new “increase.” Conversely, others hold that any inflow of funds, regardless of source, constitutes an “increase” and should be tithed. For them, money received becomes part of their financial resources, inviting a proportionate return.

Beyond cash gifts, other forms of non-regular income present similar considerations. Inheritances are generally not subject to federal income tax for the recipient, though income generated by inherited assets is taxable. This aligns with the gift rationale that the principal inheritance is a wealth transfer. In contrast, non-recurring bonuses are classified as supplemental wages and are fully taxable income, like regular salary. Similarly, lottery winnings are considered ordinary taxable income by federal and most state tax authorities, subject to the same tax rates as earned wages.

The differing tax treatments highlight a key consideration: whether funds represent new economic gain or a transfer of existing assets. Funds explicitly defined as taxable income, like bonuses and lottery winnings, clearly fit the “increase” definition for tithing. However, for gifts and inheritances, which are generally not income-taxable, the decision often hinges on a personal interpretation of “increase” and whether it encompasses all financial inflows or only those from labor or investment returns.

Making Your Personal Tithing Decision

The decision of whether to tithe on gifts and other non-regular income is a personal and spiritual one. It involves reflecting on one’s financial philosophy and how it intersects with beliefs about generosity and stewardship. Guidance from one’s religious community can also be a factor.

Individuals might reflect on what “increase” truly signifies for them. This introspection can involve contemplating whether tithing is about giving from all incoming resources, or specifically from earned income and profits. Consistency with one’s overall tithing principles is practical, ensuring the approach to gifts aligns with broader financial and spiritual practices. Ultimately, the choice involves consideration and a desire to express generosity in a way that resonates with one’s convictions.