Originally Posted by Elliemaekarnes
Help please. My brother is president of a for profit company and is looking to donate toward the dog rescue nonprofit group I started this past May. What is the best way for both companies to benefit in this situation. Should they make a monetary contribution and if so what are the maximums allowed. Or would it benefit him if they purchase items for donation such as dog food and kennels instead? We have not filed for our 501c3 status as we are still figuring out all the details of our group at this point and hope to in the future but don't know if that would make a difference or not.
BASICALLY, it depends on your specific situation. How it is reported depends on the
type of entity. Charitable contributions made by a business are not usually deducted in the same way you would deduct a charitable contribution on your 1040. Rather, these contributions USUALLY pass through to the sole proprietor, partnership or shareholders of a corporation. If your business is a corporation, it is reported on your
corporate tax return form 1120, line 19, and is limited to 10% of
adjusted taxable income
making donations to a charitable organization on behalf of your corporation is both goodwill and good for your income return. aslongas you are an owner/sh of an S corp, the charitable contributions you make in the name of your company can be claimed on your 1040. C corp owners claim charitable deductions on the corp's tax return 1120. To claim charity-related tax deductions, the donations must meet specific irs rules. Regardless of whether your corp uses the cash / accrual method of accounting, you can claim tax deductions for only charitable donations that you make by the end of the tax year you're claiming the deduction for physical items to a charity, you can claim the fmv for that donation only. When you donate cash, you can claim the actual cash amount of the donation.but remember, you can deduct up to 50 percent of your charitable donation in most cases. If you donate to certain veterans organizations, private foundations or cemetery or fraternal organizations, you are allowed to deduct only up to 30 %. So you need to consult with a licensed tax adviser to determine the full tax deduction you can take for your corp's specific charitable contributions AND MORE ACCURATE INFO IN DETAIL.