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.

Business Charitable Contributions

Take a look at the rules and examples as stated in IRS Publication 535.

Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments aren’t charitable contributions or gifts and are directly related to your business. If the payments are charitable contributions or gifts, you can’t deduct them as business expenses. However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. See the Instructions for Form 1120 for more information. Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040).


Examples of when you CAN write of funds given to charitable organizations.

Example 1: You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. The purpose of the ad was to encourage readers to buy your products. Your payment isn’t a charitable contribution. You can deduct it as an advertising expense.  

Example 2: You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. Your payment isn’t a charitable contribution. You can deduct it as a business expense.

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.

mwalkerwade_E15 at 30
CTEC ID •A258206 for 2013-2016 •A131004 for 2003-2013

IRS Publication 535

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