We all agree that it is a mitzvah to give tzedakah, but few of us understand the actual requirements with regard to how much to give, what qualifies as tzedakah, and when it must be given. The purpose of this essay is to spell out the requirement in a form that is easy to understand and straightforward to follow. It is my hope that this will lead all of us to proper observance of the mitzvah of tzedakah. Please keep in mind that this essay is for informational purposes only. For actual halacha, please consult with your rabbi.

How much to give?

A Jew is required to tithe his money and donate between one-tenth and one-fifth to tzedakah. For someone who is just begining to donate to tzedakah, this is best accomplished by giving away at least one-tenth of his net worth immediately, then donating at least one-tenth of his income each year. This can be a daunting consideration at first, but don't despair; instead begin giving small now and work up to the minimal one-tenth requirement. Also note that it is forbidden to give more than one-fifth as we are concerned that a person who gives away too much will become impoverished and come to rely on tzedakah himself. (This limit does not apply to those who are extremely wealthy.) The requirement to give one-tenth is referred to as maaser, a Hebrew word translated as "tithing".

When must the maaser be given?

Maaser must be given immediately, that is, as soon as you earn your money you have an obligation to tithe from it. The Chofetz Chaim says that it is praiseworthy to give smaller sums frequently. One who gives a large lump-sum once yearly will only think about tzedakah once per year; one who gives small sums frequently will always be thinking about tzedakah This will mold his character by making him into someone who is always looking for opportunities to give tzedakah. Thus it is common practice for religious Jews to give tzedakah several times daily, often when attending services at synagogue, in addition to making periodic large contributions.

How much should I give? Use my Maaser Calculator to find out!

It would be simple to compute maaser if you received all of your money once per year, as you could immediately make a payment of one-tenth, but a modern economy is quite complex. Paychecks may come weekly, but tithing each check individually might not be practical when money must also be set aside for monthly rent payments. And what about capital gains and losses, or once-yearly commission or bonus checks? What about taxes withheld or paid — how do these figure into maaser computations?

I once commented to an accountant who is a Torah Jew that we should be able to compute my maaser requirement on an annual basis from my tax return. What follows is an explanation of this computation using a standard US 1040 tax return. Based on this explanation, you should be able to easilly make the same computation with similar forms.

First, we must determine: what is our income for maaser purposes? The general rule to follow is simple: Hashem is your partner in your income. In computing your maaser income, you can deduct the normal and acceptable expenses that any other partner would allow you to deduct. What you couldn't deduct from a flesh-and-blood partnership you can't deduct form Hashem either. Thus:

• You can't deduct the cost of living such as housing expenses or the cost of owning a car.
• You can't deduct the cost of food or clothes (except for clothes required for your business, such as your uniform if you are a police officer).
• You can deduct expenses incurred purely for the purpose of earning your income such as the cost of your uniform (above), normal commuting costs (more on this below), or the expense of margin interest as offset by investment profits (Schedule A line 9). In general, unreimbursed job expenses are completely deductible.
• Personal expenses, such as the cost of food while doing business or on business travel, are not deductible for maaser purposes even if they are deductible for tax purposes. Thus if I entertain a client at dinner and the dinner costs $100, and if this dinner and such an expense is deductible as a normal business expense, and if eating dinner at home would have cost me $5, then $95 is deductible as a maaser expense.¹
• By the same token, dry cleaning expenses while traveling are only deductible to the degree that you occur additional expense due to your required business travel. (This is typically the case in a hotel where laundry and dry cleaning are very expensive compared to what you would pay at home.)
• In general, you can use commonly accepted accounting standards for the tax or accounting jurisdiction in which you reside.

Based on these rules, to compute your maaser income:

Finally, there are a few additional special accounting considerations to cover:

• For maaser purposes, you may deduct carry-over losses but only to the degree that they offset comparable carry-over income. Thus if you have a carry-over capital loss because your total capital losses exceed your gains in a given year, you can't carry that loss forward for maaser purposes. Instead, take it as a maaser deduction in the year incurred.
• If you have no income but instead lose money one year, you cannot carry that loss forward against maaser income in coming years.
• There are no carry-back losses or profits; include both of these in the year earned rather than the year accrued for tax purposes.
• With regard to your Schedule C or E, there is no need to add back expenses that would have been excluded if listed on your Schedule A. These expenses are part of the business transacted on the Schedule C or E and are thus directly deductible there. However, if this results in a net Schedule C or E loss, this loss cannot be deducted from ordinary maaser income.

That's it, you've computed your net maaser income. Having done so, you can now compute your maaser obligation for the year as between one-tenth and one-fifth of this amount. Next, determine how much of your obligation is still owed by computing how much of your charitable contributions over the period qualify as maaser. To compute this amount:

Once you have added up your maaser given, subtract this from your maaser obligation and the remaining figure gives your remaining obligation. Contribute this amount to an appropriate maaser recipient — either a person, fund, or institution — immediately. Note that this amount counts as maaser toward the accounting period in question, not the accounting period you are currently in. Thus when computing your 1040 in April of this year, if you find that you are $1000 short of maaser for last year, remember not to count that $1000 contribution when you compute maaser contributions made this year. Doing so would double-count the $1000 as maaser in both of the two years in question.

Finally, note that some authorities prefer that maaser be computed every three or six months rather than annually. Also note that even those who hold that maaser can be computed annually agree that a Jew must constantly tithe his income by working toward an estimated maaser obligation. At year-end, he must make up for any shortfall. A good way to do this is to constantly tithe your paychecks at a 10% rate, then compute your precise obligation at year-end; I do this after preparing my federal tax return. At that time, I can make up for any obligation not fulfilled. If it turns out I have given more than was necessary, haray zeh meshubach!

This page is written based on the piskei halacha of Rav Moshe Feinstein ZTz"L, Rav Shlomo Zalman Auerbach ZTz"L, the Chofetz Chaim, and others, as brought in sefer Maaser Kesafim, edited by Cyril Domb, published by Feldheim Publishers. Please consult with your rabbi before acting on this information.

See also Ma'aseir Kesofim by Rav Yosef Fleischman.

Notes:
¹Aruch HaShulchan Y.D. 249:7 allows deduction of the full cost of the meal, but Beit Dino Shel Shlomo (Y.D. 1) and Rav Shlomo Zalman Auerbach disagree. See discussion in Maaser Kesafim pp. 60-61.
²Rav Moshe Feinstein says to use only vital commodities like essential foods in computing the change in cost of living. Houses and luxury items are not relevant since their values change for a variety of reasons. Igros Moshe, Y.D. Vol. 5, 114 as brought in Maaser Kesafim pp. 47-48.

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