Business tax deductions

Only corporations can deduct charitable contributions and donations as business tax deductions. The charities which the business tax deductions are made must have IRS charitable non profit status.

How much can a corporation deduce business tax deductions?

Corporations can deduct business tax deductions up to 10% of their taxable income. Charitable contributions of $250 or more must be substantiated by a written acknowledgement or receipt from the recipient for business tax deductions to be allowed.

Donation of depreciated or written off assets

Corporations that donate used equipment, furniture or other depreciable assets cannot claim business tax deductions if the assets are already depreciated or written off.

C corporations special business tax deductions

C corporations (not S corporations) that donate inventory to qualified charities can get business tax deductions for more than the cost of the inventory. C corporations can deduct the cost of the assets plus half the difference between cost and regular sales price, up to twice the cost of the inventory.

Sole proprietorships, partnerships, and limited liability companies

Sole proprietorships, partnerships, and limited liability companies may not take business tax deductions for charitable contributions. The owners of these businesses, however, may be able to deduct charitable contributions on their personal IRS Form 1040 tax returns.

Donating to charity for publicity

If a business donated money to a charitable organization and get favorable publicity as a result of the charitable contributions, the charitable contribution is not business tax deductible as charitable contribution. This type of charitable donation does not meet the IRS requirement for business tax deductions for charitable contribution. However, it is fully business tax deductible as an advertising cost.