So you enjoy giving money to charitable organizations, do you??? Yes! I knew you did. You love to give to great causes and so do I. So give and don’t stop.
In addition to the good feeling of giving, it’s also kinda nice knowing you can write those donation off on your taxes. Right???
Well.. not so fast.
Prior to the 2017 tax reform, the rules about businesses giving to charitable organizations and then using those deductions as a tax write off were a bit of a grey area. And, yes we played within the grey because we could. However, all of this has changed now. The new tax law provides a clear NO to solo props, partnerships and S Corps.
Take a look at the rules and examples as stated in IRS Publication 535.
According to these new guides, you may deduct charitable contributions on your 1040 Schedule A, also known as your itemized deductions on the long form. To see how these deductions would work for partners in a partnership, take a look at this article: How To Deduct Charitable Contributions.
Great… So, you may deduct the charity on your personal 1040 Schedule A. But, there’s still a problem. The new tax code dramatically raised the standard deduction rates. This means the average tax payer will no longer use itemized deductions, and thus will not need the contribution as a tax write off.
With that said, in most cases you’ll just need to continue giving from the heart because, unless you donate an awful lotta money, the charity as a tax deduction gig is up.