Tithing Settlement & Full Tithe Question/Opinions


Sharky
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If you own a business, what do you pay tithes on?

Do you wait until you have your profit-loss statement & pay on the "profit"?

What if you have income from an "outside job", yet in lean times when your business is struggling most of that outside incomes goes into keeping the business operational?

Now change the word business to farm/ranch.

Let me explain the real situation & then let me know your opinions & thoughts .... sorry for the long explaination.:mellow:

So we have a new Bishop, brand new. He's a "big city guy", grew up in the city (in Utah) & thru some strange twists of events has now found himself living in a very rural area, primarily a farming and ranching area, outside of Utah. Our ward covers a couple thousand square miles.

A member of the ward came to me after tithing settlement because he was confussed & upset after the Bishop expressed a belief that this brother was not a full tithe payer .... with both of us being farmers/ranchers I am in a simular situation as I determine my "increase" or "income" much the same as this brother does.

It has always been my practice to take ALL of our income from ALL sources & add all that together, then minus out the costs/expenses of operating the farm & ranch (basicaly the business operations costs) as the farm/ranch is our primary means of support. That results in an "adjusted income" amount.

That adjusted income is what we have always paid tithes on, though generally my actual tithes have been a bit more gracious (higher) then that amount would indicate.

Basic business bookkeeping says if you sell $100 in goods but those goods cost you $80 to produce, then you only had $20 of income.

Years like 2011 - 2012 with a severe drought in place, I had to pick up odd jobs with every penny earned going to keeping the farm operating. My wife went from part-time work to full-time, allowing her income to cover household & family expenses as well as providing income to help keep the farm operational.

The reality is, we would no longer have a farm or land or a home if it weren't for the disaster relief funds (mostly interest-free loans).

All of the income that has gone to family or household expenses & then some has been tithed. As well as the full value of any farm product that we consume rather then sell.

Anyhow, this new bishop is of the opinion that any income that is non-farm income should be tithed in full even if the sole purpose & intent of that income was to keep the farm (normally our sole income source) in operation.

So I asked this Brother if he felt comfortable declaring himsef to be a full-tithe payer, indicating the matter is truely between Him & the Lord.

He said that while the Bishop was "calling him out", a weird dollar amount popped into his mind, $117.54. He wrote a check for that amount, handed it to the Bishop & said that with that payment he felt that He & the Lord were both "at peace" with him saying he is a full-tithe payer.

So what are your thoughts & ideas here?

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My thoughts:

  • I have never owned a farm or other business, so I'm not particularly well-qualified to voice an opinion.

  • Businesses that I know of tend to keep very tight books; there is little "gray area" where some money isn't really business money but is used for the business. Aunt Fran's $100 is a business loan (or gift) or it is not.

  • I went to much of high school living among farmers, who insisted that they were on the verge of bankruptcy and could not possibly keep running their farms with any sort of profit. Often, their 16-year-old children would drive to school in brand new sports cars, then complain in school about their family's dire financial straits. When asked about their new cars, they would uniformly reply with something like, "When we're already $150,000 in debt, what's another ten thousand?" (This was back in the late '70s.)

    In my house, we have never operated on the principle of "we're-already-deeply-in-debt-so-let's-pile-on-some-more-and-live-like-kings." I have seen some who do exactly this, and when they declare their inevitable bankruptcy, lose their 3,000-square-foot homes, and have one or two of their four cars repossessed, then complain about the unfairness of it all. To me, their money mismanagement seems outright dishonest, like a form of theft.

  • If "business expenses" include meals every day (complete with $100 dinners), trips to Disneyworld (because, hey, Orlando isn't that far from the Tampa conference), and use of a company car (a perfectly legit perk; what difference does it make if they pick up gas for my personal errand-running?), then I think there is some entitlement thinking going on, regardless of whether the tax-free expenses pass legal muster. To my mind, this seems like a form of increase that should be tithed.

  • Bishops are human beings who need to be given opportunities to grow. Sustaining a leader in his calling must consist of more than merely raising one's hand when asked; it must include some sacrifice at times. If a sacrifice has no personal cost, it is not much of a sacrifice.

  • There are (at least) two sides to every story. Sounds like you have heard only one.
Edited by Vort
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The statement in Handbook 1 is as follows:

"The simplest statement we know of is the statement of the Lord himself, namely, that the members of the Church should pay one-tenth of all their interest annually,' which is understood to mean income. No one is justified in making any other statement than this."

From my training as a ward clerk, it is my understanding that whatever you declare yourself during tithing settlement is what the bishop is expected to accept. He might question or probe a little, but if you are resolute that you are a full tithe payer, the expectation is that he records that you declared yourself a full tithe payer.

In the circumstances of a business owner or a farmer where your paycheck is not static, it gets tricky to determine what you ought to tithe. I've known many people with a standard 9-5 job that are adamant that you should pay on your gross income before taxes, and are equally adamant that business owners should do the same. But at the same time, they don't consider that their 'gross income' doesn't include taxes paid by their employer or contributions paid by the employer to their retirement fund. As a rhetorical question, if they don't expect themselves to pay a tithe on those compensations, why should they expect a business owner to do so?

My point in bringing that up is not to make any kind of claim of whether you should pay on the gross, the net, the after costs, or whatever. Personally, I really don't care what you do. The only advice I can give is that you evaluate why you are choosing to tithe what you do. If you are looking for ways to reduce the amount of tithing you have to pay, then you're probably not holding to the spirit of the law. If you fell you are trying to be honest with the Lord in what you earn and what you should tithe, then that's good enough for me.

Lastly, give until it feels good to give. Can't go wrong with that.

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[*]Bishops are human beings who need to be given opportunities to grow. Sustaining a leader in his calling must consist of more than merely raising one's hand when asked; it must include some sacrifice at times. If a sacrifice has no personal cost, it is not much of a sacrifice.

Off topic: Sincerely, Thank you for this reminder Vort! :)

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Thanks Vort & all the others that commented so far.

Yeah, I only know this individuals side of the story .... though the example I gave is my personal life.

When the wife & I did tithing settlement we didn't bring up the sources of our income, simply answered "Yes" when asked if we are full tithe payers.

We are comfortable with what we have tithed & feel the Lord is as well.

In reality our 2012 tithes will not really be "full" until March 2013 when we have all the numbers crunched & all the farm profit/loss docs & other tax forms completed & know our bottom line. It's that way every year, though we do track our personal/family/household expenses paid out of our "income" plus whatever farm goods that find their way to our table & pay tithes on those things regulalry.

I have always struggled when I see local farm kids driving new trucks that I know ran them $40k or more.

I know what their parents are experiencing as I too am experiencing it.

My kids almost always rode the bus. Very rarely have I ever bought anything new & in years of plenty we are always sure to put money into savings (& we tithe it) so that in the lean years we can hopefully avoid piling on larger FSA Farm Loans or in this case Disaster Relief Loans.

I can't judge other people's decision, just my own.

Just wondering opinions of what others do or would tithe if they are self-employed & most if not all oftheir income comes from that self-employment.

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Lastly, give until it feels good to give. Can't go wrong with that.

Yeah. I like that.

Back when the kids were young & we had apple & peach orchards, the pickers would come through & pick everything that was ready. Then I'd send the kids out to glean what was left & we'd box it all up & haul it all into the metro area to a CAS food bank there.

The kids always complained about doing all that work "for nothing" .... I see them now, as adults, still doing similar things & teaching their kids likewise.

I don't know if this was a Mormon tv ad or some other religion, a man telling of his recollection as a kid, a grouchy man pulls up & dickers with his father over the price of a bushel of apples. The final price too low according to the kid & then his father instructed him to put an extra bushel in their trunk ....

That was very much the way I was raised & hope I raised my kids the same way.

Edited by Sharky
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Having owned businesses, I agree with you, there were times in the early days that I had to pick up extra income which went right into paying the business debts. I would tithe off the profits and declare myself a full tithe payer -- the Bishop is not supposed to probe.

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the Bishop is not supposed to probe.

I would qualify that statement a little. I agree, the bishop shouldn't be probing with the intent of ensuring that every member in the ward shares the bishop's idea of what income should be tithed. But the bishop should probe if it will help the member become more comfortable with the member's decision about what income should be tithed

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the Bishop is not supposed to probe.

I have to agree with MOE that this needs to be qualified. The bishop is to teach the principle of Tithing (or otherwise review it) to help the members understand it.

If he sees an amount that appears low without reason... he needs to ask why. This will help the bishop be sure that they understand the principle of Tithing and/or may also show a sign of financial hardship for the person/family in question that the bishop should be aware of. Both possibility are well within the jurisdiction of the Bishop, and neither are quibbling over how the tithing is being figured.

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If he sees an amount that appears low without reason... he needs to ask why.

* * *

...may also show a sign of financial hardship for the person/family in question that the bishop should be aware of...

Thanks. I think we all tend to forget that there are those families out there that will not ask for help & may even hide those needs from even the most regular home teacher, but do or may well have a serious need, temporal or spiritual.

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Farmers have my sympathy; its hard enough to budget an irregular income, without having to worry about weather, unpredicted crop failures, etc.

I changed jobs from government employment to being an independent contractor about ten years ago (when I was not a member of the church). My nominal income rose 30%; in reality, I stayed exactly the same, the extra money was intended (and expressly negotiated as part of contract) to cover business expenses or otherwise keep benefits like health insurance in place (normally paid by employer. I considered my actual salary not to include the business expenses or other reimbursements, altho obviously I pay taxes on the whole shebang and take a deduction. When I report my "salary" to my professional organization, as dues are based on salary, I don't include reimbursements for expenses. So when I joined the church, the answer was easy, I tithe on "salary" and not "salary" and money intended to cover the normal business expenses.

IMHO, if you can objectively justify your thought process, you are good. It's between you and God.

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Guest Doctrine

first of all why is the bishop going thru all the details of your money he only needs ask if your a full tithe payer and that is that like it has been said before it between you and the lord. also the way you explained tithing is right as a bussiness owner you pay off of your profit, look at insutute manual section 119 it talks about tithing from a bussiness point of view.

also you could do what i do and that pay church head quarters and skip the middle man and that way only you and the church and the lord knows what you paid, since the bishop will not see that number.

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You are talking about businesses right?

No, I'm saying that that is the pretty generally accepted definition of income. Self-employed individuals quite commonly regard income from the business as their personal earnings, but not all treat it this way.

Regardless, revenue and income are not synonymous. Some individuals may choose to pay tithing on revenue as opposed to income which is fine and others on income as opposed to revenue (that is between them and God) but the definition above stands.

-RM

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No, I'm saying that that is the pretty generally accepted definition of income. Self-employed individuals quite commonly regard income from the business as their personal earnings, but not all treat it this way.

Regardless, revenue and income are not synonymous. Some individuals may choose to pay tithing on revenue as opposed to income which is fine and others on income as opposed to revenue (that is between them and God) but the definition above stands.

-RM

The problem many have with that particular definition is that someone (like say me) could use that definition to say I owe no tithing. Expenses on a personal level can run pretty close to income for most people. It would be an easy way to try to evade the sacrifice that the Lord requires of us (which tithing is) and miss the blessings. There for I am leery of that method unless the person in question is running a business. (I do understand that running a business is on a whole different level then what I normally deal with)

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I totally get that estradling, but that doesn't give us wholesale license to manipulate the English language. Income has a very distinct definition.

To the larger point, I understand exactly where you are coming from, but isn't that between the individual and the Lord?

Perhaps an example:

1. A self employed individual (electrician) has revenue of $500,000 this year.

His cost of operations from the business is $380,000 leaving him $120,000

He reinvests $40,000 into the business leaving him with $80,000

He pays taxes of $28,000 leaving him with $52,000

His expenses to run his family (mortgage, food, heat, light, etc.) run $27,000 leaving him with $25,000

He invests $10,000 of this for retirement leaving him with $15,000

Does he pay a tithe of $50,000 (that leaves him $35,000) in the red, $12,000. $8,000, $5,200, $2,500, or $1,500? (I know of individuals who have done all of the above and consider themselves and are considered by the church to be full tithe payers in good standing).

If he tithes on the $10,000 that he invested for retirement, must he also then tithe on it when he withdraws the money, or only on the interest?

Here is the statement from the handbook:

"For your guidance in this matter, please be advised that we have uniformly replied that the simplest statement we know of is that statement of the Lord himself that the members of the Church should pay one-tenth of all their interest annually, which is understood to mean income. No one is justified in making any other statement than this. We feel that every member of the Church should be entitled to make his own decision as to what he thinks he owes the Lord, and to make payment accordingly."

The brethren have defined interest for us as income. Income has a very distinct definition. The brethren are all very intelligent and educated individuals with years of business experience. I am sure that they understand the definition of income.

Just my $.02

-RM

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Your example is one of running a business that I explicitly stated I was excluding from my expression of concern

But your issue of concern is distorting the defintion of income... A person who works for somebody receives an income in the form of a paycheck. It's very easy to determine what that income is because that's what you pay income taxes on. So the result of subtracting your family's three squares a day from your paycheck does not give you your income. Make sense?

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I totally get that estradling, but that doesn't give us wholesale license to manipulate the English language. Income has a very distinct definition.

In actuality in terms of tithing I believe the word "income" is a word people have used to to define the terms "Increase" & "Interests".

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In actuality in terms of tithing I believe the word "income" is a word people have used to to define the terms "Increase" & "Interests".

No Sharky, Income does not define Increase & Interests. Income is used by the Church as specifically stated in the Handbook of Instructions to GUIDE people on how to determine Increase & Interest. The Handbook does not use Income to DEFINE Increase...

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first of all why is the bishop going thru all the details of your money he only needs ask if your a full tithe payer and that is that like it has been said before it between you and the lord. also the way you explained tithing is right as a bussiness owner you pay off of your profit, look at insutute manual section 119 it talks about tithing from a bussiness point of view.

also you could do what i do and that pay church head quarters and skip the middle man and that way only you and the church and the lord knows what you paid, since the bishop will not see that number.

Institute Manual Section 119? I'll hafta to look that one up!

Yeah. We actually started doing the "bill pay" thing for tithing etc about mid-way thru the year so our bank transferes the funds directly to Salt Lake. SO MUCH EASIER!

I did suggest it to the Brother who came to me to talk about his tithing settlement experience.

I'm starting to think our Bishop is still learning that farmers have very irregular income, we get large amounts of money at very irregular intrevals. And while those dollar sums may be large, when you are feeding a ton or more of hay every day & paying $200 & up per ton, those large sums of income really aren't income. Or when your get 100k for your wheat crop but how much went into buying the seed or paying for the deisel to work the soil & plant the grain & harvest it?

I think it was Vort that pointed out Bshops are human & need the opportunity to learn & grow just as we do.;)

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But your issue of concern is distorting the defintion of income... A person who works for somebody receives an income in the form of a paycheck. It's very easy to determine what that income is because that's what you pay income taxes on. So the result of subtracting your family's three squares a day from your paycheck does not give you your income. Make sense?

Antess I believe I understand my concern better then you do. I might not have expressed it as well as I like and for that I apologize and I'll try to clarify.

I am not concerned about those that understand the Law of Tithing. They can live it or not, and even live it differently then I do. I don't care about that, its between them and the Lord (and their bishop)

I am concerned about (specifically on site like this) those that don't yet have an understanding of what the Law of Tithing is about. If they come on and see a simple formula as RMGuy has given (which is technically correct) and then start asking question like 'What is and acceptable expense?' Which we don't have an answer to (although there are many opinions on the matter.) The natural response, without the understanding, is to try to focus on paying as little as possible. Which while natural, is an incorrect focus, in my opinion. I feel the correct focus is to make an acceptable sacrifice/offering to the Lord. Something that can't really be captured in an equation.

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Antess I believe I understand my concern better then you do. I might not have expressed it as well as I like and for that I apologize and I'll try to clarify.

I am not concerned about those that understand the Law of Tithing. They can live it or not, and even live it differently then I do. I don't care about that, its between them and the Lord (and their bishop)

I am concerned about (specifically on site like this) those that don't yet have an understanding of what the Law of Tithing is about. If they come on and see a simple formula as RMGuy has given (which is technically correct) and then start asking question like 'What is and acceptable expense?' Which we don't have an answer to (although there are many opinions on the matter.) The natural response, without the understanding, is to try to focus on paying as little as possible. Which while natural, is an incorrect focus, in my opinion. I feel the correct focus is to make an acceptable sacrifice/offering to the Lord. Something that can't really be captured in an equation.

I apologize, I can't seem to understand your point of view. The equation is a definition of Income. The definition doesn't change just because you used it to figure out tithing, or you use it to figure out taxes, or you use it to answer a math test. If somebody says - you pay tithes on your income and then you give him the textbook definition of Income if he asks what is an income - it doesn't really change anything. But, if a person has learned income from high school math or has paid income taxes in his life but when faced with tithing he can't figure out "What is an acceptable expense" when receiving a paycheck, then the issue is not with the definition. The issue may be his desire to manipulate the law of tithing because he does not want to pay it. If a person doesn't want to pay honest tithes, guilting him into it by avoiding certain definitions of income doesn't really help much.

But, that's just the way I see things.

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