Official Tithing rules (for myself)

Official Tithing rules for me and my family.

For me to reflect change or read to remind myself where I stand on as far as I am concerned and understand the concept of tithing.

Tithing:

Pay 10% of your total interest earned.

Or pay 1/10th of your income

Income definition:

money received, especially on a regular basis, for work or through investments.
"he has a nice home and an adequate income"
synonyms:    earnings, salary, pay, remuneration, wages, stipend; More

For those who don't know for years I was taught to pay tithing on my gross pay. My dad would say that social security and taxes were our responsibility. They were in fact a bill from your total income and since they were part of your total income the gross is where you pay your tithing. To which I reply, Dad you paid all these years on your gross pay. Are you paying on your social security checks your receiving? My dad has been paying social security for 45 years. If my dad paid tithing on all of his paychecks he has already paid tithing on 'x’ amount of dollars he put into social security, right? So if he were to pay tithing on his social security checks he would be paying double tithing. So to be fully tithed is not as it seems.

When I thought about it more deeply I came up with another question. Say a self employed painter and a company employed factory worker drive to work 30 miles away. The painter gets paid 200 dollars for the job. That's his gross pay. Does he pay on that 200 dollars? No. He has expenses that he should not include as income. Paint brushes, Paint, paint supplies, car payment, insurance, and gas are all expenses he deducts before finding his taxable or regular income. That thought brought up a question. Do regular company employed individuals have what I call tithing exempt expenses related to work that are part of working?. A painters fuel company vehicle and insurance are all tithing exempt. If the company employed person needs a vehicle to get to his job why wouldn't some of his expenses he needs be tithing exempt such as fuel or part of his insurance or car payment? If he drives his car 80% to work would he deduct 80% of his driving expenses including 80%of his payment or 80%of his insurance or car payment? If you somewhat agree with my logic, then what if he drives an expensive sports car?

For me I at the time felt that fuel that was used to get work and back home in my paid off 500 dollar car should be tithing exempt. Like a self employed painter I did have expenses related to work. My gas money was not going to my family, or personal recreation, it was going to my work. Also note at the time I did not tithing exempt any of my insurance.

The next and final thing i am going to write about  before I write my rules is a mortgage. Should it be tithing exempt? Obviously it is a personal purchase so the short answer is no. But then again are you not losing income on that personal investment?

If a person buys a investment property and rents it out he collects his rent minuses his expenses which includes the mortgage payment then pays his tithing off his net right? If his rent is 1200, he had no repairs, and his mortgage including insurance and taxes is 800 he would net 400. So does he pay 120 on the 1200 or 40 on his net? If your argument is a homeowners mortgage is not tithing exempt then what about a landlord? is his second “personal” purchase and investment home mortgage tithing exempt? Most lds real estate investors would argue yes they are not included as INCOME until he sells the property. Then why doesn't the same rule apply to your personal residence and mortgage. Essentially isn't your house an investment too?

In my opinion the problem with a house you live in and pay mortgage is that as long as you live in it you actually are losing income. Income you invest but don't see a return until you sell that property. Similar to a landlord except a landlord makes a profit until he sells, yet he doesn't see a profit on the mortgage payment until he sells. You don't know how much you actually earn until you sell your house. In fact you may lose all the earned income on that property through a down market and a job loss such as the previous owners of my first house. To further illistrate my argument and reasoning I have put together Excel sheets showing what happens when a homeowner pays tithing before paying his mortgage and then. Sell it 5 years later at a 30% increase

So for this example I'm using an interest and principal only Loan. Keep in mind most mortgages will have a escrow account that is for paying your house insurance and taxes. Comparing apples to apples do landlords consider those expenses tithing exempt or do they pay tithing on the escrow? Again after you sell your house you have to ask the question how much did I invest in this house verses how much did I make and again what was my actual interest earned or earned income that I need to pay tithing on.

Going back to the example.

Line 2 we have the original purchase and loan amount at an interest rate of 4.5% (line 3).

Our total amount we pay for princable and interest line 4. 45,601.80 line 5 is the total you would need to make if you chosed to pay tithing before paying your mortgage. For example. If I make 1000 dollars I would pay 100 dollars towards tithing and have 900 left over.The 900 dollars is a then called a tithed amount. If you were to pay a tithed amount toward your mortgage you would have to make a larger amount to pay tithing on. To figure out that number you would divide the tithed amount by 9 and then multiply it by 10 thus is how I came up with line 5, 50,668.66  if you were a pay tithing before mortgage person in 5 years you would pay 5066.87 (line 6)

Now if the house sells at a 30% profit after 5 years

(180,000, line 7) the payoff amount would be 136736.88 (line 8) after your expenses for selling the house (line 10-11) your total profit for your house would be 31763 (line 12) so after 5 years your total income earned off this house is line 12. Almost 19000 less than what you have paid tithing on all of these years. Now there are some who still knowingly pay tithing on that amount thinking that too is profit (line 13) in doing so they would pay 8243, when I argue they only earned line 12 meaning if you are a gross payer of tithing you overpaid 5067 (line 15) if your mortgage payment is tithed and you count line 12 also as income. If you figured line 12 not as income you overpayed 1890.55 (line 16)

This is why I argue that because you do not know how much you will profit when and if you sell your house the mortgage interest and princable should wait to be tithed until after you sell or fully pay off your house. If you pay off your house you should be tithed on the original purchase price of the house. For example my original purchase price for my current house is 280k. If that 280k would be tithed I would owe 28000. Right? WRONG!  252000 is tithed if you pay 28000. To be tithed on 280k you again divide by 9. 31,111.11. So pre-tithed would earn 311,111.11. if you were to later sell the house you would then deduct the profit from the original purchase price and other expenses and that entire number would be considered income.

Here is another Excel example of that.

This is NOT doctrine, just my opinions.

Last question is what about your escrow account? Do you pay tithing before or after your escrow account? I've made my case on principal andi nterest but what about taxes and insurance? Well for this question I ask it 2 ways. If you own a second property and are renting it do you count the taxes and insurance as income or not. If you don't then why shouldn't a homeowner living in his residence pay that. In the end your total price you put into the home does include property taxes insurance and even upgrades so again I will argue that there are actually 3 ways to be tithed on a home purchase.

#1 pay a full tithe on your income before your house payment. When you sell find out how much money you paid tithing on and how much you made off the house and account for overpayment for future income.

#2 Pay a full tithe on principal and interest only then after selling house account for actual profit and pay or adjust on future income for overpayment.

#3 The option I am going to use. Pay a full tithe after you pay your mortgage then after selling the house or paying it off account for how much tithing you owe after expenses.

Final reason and judgment for that argument a house like an investment house is an investment that does not produce income until after the investment is completely paid off or sold.

Now that I am done with my explanation of real estate and tithing here are my other rules.

The Durango and the Van payment will be 50% tithing exempt due to buisness use. If sold vehicle loss from original purchase price will calculated

The Cruze will be 100% Tithing exempt due to it being a buisness purchase for the time being.

All house upgrades needed again will be 100% tithing exempt. Tithing will be paid after the house is sold.

Lawncare and all other household expenses will be the percentage of square footage from the home office of the whole house currently around 12%.

All fuel at this time will be a flat 50% due to work related trips.

Question for the future. Because i have a home office do I add an additional 12 % because of th square footage percentage the office has.

And that's all I can think about. I will adjust and correct the rules over time as i pray and life changes.