I understand that if I'm in a 20% tax bracket, I have itemized deductions above standard, and I give $1000 to charity, that I'll pay $200 less taxes, so the gift actually cost me $800. I didn't actually save money.
But looking at a slice of the most recent tax brackets:
Tax rate: 15% Single filers: $9,226 to $37,450 Tax rate: 25% Single filers: $37,451 to $90,750
If my AGI was $37,500 and I donated $100 to charity, then I'd pay $5610 instead of $9375.
Is this really how it works? When I've been looking around the net for information on this issue, I have not seen any articles that point this out. They talk instead about giving because it's good to give (I happen to agree), but that it won't actually save you any money.
Sub question: Is it different for a business vs. an individual?