Currently the ‘Charity’ expense type appears to act as any other cost, rather than being a deductible expense, which for some users can make a big impact.

Modeling this accurately would get complicated, but a reasonable way to implement a useful approximation that also works for more than just the Charity use case might look like this:

1. Allow for expenses to be marked as ‘Deductible’; enable a tax setting ‘Itemize Deductions’. If ‘Itemize Deductions’ is selected, subtract everything ‘deductible’ from top line income before computing taxes, if not, use the standard deduction. (No idea how this works for non-US models, sorry!)

2. Optional Additional Complexity: Allow a deductible expense to be payed directly from a taxable investment account without paying a capital gain on liquidating the taxable asset. (This is what most anyone with significant assets in taxable accounts, and significant charitable expenses, would be doing.) This would need to be specified on a per-expense basis, as it’s only applicable to some kinds of deductible expenses.