As a small business, there is a good chance that you take pride in the community that you live in. For this reason, many small business owners are always looking for ways to give back. Charitable donations might be the best way to help strengthen your community. Not only will it leave you feeling great, but giving back also has tax benefits as well. When you make charitable contributions through your S corp, it can help to reduce your personal tax liability. Mark Dicus & Company is here to share some tips to help ensure your charitable contributions are working for your small business.
Know What the Charitable Deduction Is
When you give money to a qualified charity, you are able to deduct it on your taxes. Even when you make these donations under your S corp, they ultimately will be claimed on your personal taxes. This is of course, if you itemize your deductions. This can have a big impact your overall tax ability. Your charitable donations don’t always have to be cash either. You can give goods and property as well.
Tips for Making the Most of Your Charitable Contributions
If you are looking for ways to make charitable contributions, it’s important that you do it right. Here are some tips to help you make the most of your contributions:
– Choose the Recipient Wisely: Before making a charitable donation, you want to make sure that the charity you’re donating to is one that qualifies for the tax deduction. You want to make sure that the charity you donate to also uses the funds in a way that you’re comfortable with as well.
– Donate Stock or Property: If you are trying to avoid capital gains taxes on property you would like to sell, you can do so by donating that rather than selling. You can also sell some property such as clothing or furniture and deduct the thrift value of the items.
– Get Needed Help: Sometimes, you might want the help of a CPA when making charitable donations. They will help ensure you are making those donations to charities that qualify for the deduction. They will help ensure you’re taking full advantage of tax savings.
– Keep Records: You will need to keep records of all the donations you make. Many organizations will give you a slip of paper that will serve as a receipt for non cash items that you donate. It can help when reporting these donations are your taxes.
– Watch Out for Ineligible Contributions: If you have made contributions to organizations like GoFundMe or other crowdfunding campaigns; you need to know that they aren’t eligible for a charitable deduction.