A Tampa CPA Explains How Charitable Donations Affect Business Taxes

Business CharityCorporations make charitable contributions to non-profit organizations all the time. So do small businesses, if not on a scale as grand as some major corporations. But scale is really the only difference between the charitable endeavors of a large company and those of a small business – the goals and benefits are essentially the same. The goals are to put the company in a positive public light while doing as much good in the world as possible. The benefits, of course, include potential tax deductions.

A Tampa CPA from Reliance Consulting, LLC, can explain how a small business can best direct its charitable endeavors in order to do the most good and to take the most advantage of the potential tax benefits. The IRS treats donations by business entities differently from those made by individuals, primarily in terms of how closely the donations are scrutinized. It is vital that a company keep a complete record of any and all donations in order to give a documented, accurate account of their charitable works during the year when it’s time to file the annual return. Records to keep include:

  • Receipts
  • Bank or credit unions statements
  • Canceled checks
  • Credit card statements
  • A written acknowledgement of receipt of the donations of $5,000 or more
  • All written records related to the transaction

It is also important to document whether the company received anything tangible in return for the donation, because the value of whatever was received must be deducted from the total donation. To help cut through the complexities of corporate giving, contact a Tampa CPA from Reliance Consulting. We have helped hundreds of businesses throughout Florida with tax planning and preparation and much more since 1984.

 

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