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    Other - Taxes

    Question

    How does a charitable donation to a non profit affect taxes for a business?
    I understand that as a non business owner I can donate to a charity and have a tax deduction. Here is what I understand. If I made $50,000 a year and I donated $2,000 to a non profit organization, my gross taxable income would go from $50,000 to $48,000, therefore I would not have to pay taxes on the $2,000. I understand that I will not receive the $2,000 back from the IRS, I would just not have to pay taxes on that portion. As a business owner. Lets say Hanes Clothing Company. If they were to donate clothing that equaled $5,000 to a legit non profit 501(c)3 and of course had their documentation for it. Would they not have to pay taxes on the $5,000, or would they receive a $5,000 credit from the IRS, which in return would replace the $5,000 all together. Also how much can a business donate to a legit non profit a year if they were to receive the full credit from the IRS or if they were to receive a deduction as an individual would? The reason I ask is because I am donating my time and creativity for a 501(c)3 and also trying to help raise funds and and items for them to help their cause financially. (can i get a tax deduction for building a website from them as in donating my personal creativity?) Just a side note, The non profit is a wonder organization that rescues exotic animals (instead of them being put down or shipped to an area that they would not survive very long) and helps to educated many different people about the awareness of how these animals are important to nature and educate them on the species themselves. Also, when it comes to their animals, they spare no expense for their care. If you would like to know more about the organization, you can email me at stainlessrooster@yahoo.com. I know this is a great wall of text, but thank you ahead of time for your answers to these many questions.
    a few seconds ago 3 Answers

    Best Answer

    >can i get a tax deduction for building a website from them as in donating my personal creativity? No. You can not deduct your cost of goods or professional services.
    a few seconds ago

    Other Answers

    • Your first paragraph - remember that not all non-profits are 501(c)3 charities, the only organizations where donations get a deduction IF and only if the person itemizes. Your second paragraph - deduction, not a credit. And only if the BUSINESS actually owned that clothing as part of their inventory. If it's the owner's items, again it's a personal itemized deduction, not a business deduction. And the owner giving the items to the business first doesn't work. Your donation of your time and creativity does NOT get you a tax deduction. If you have out of pocket expenses, those could be deducted as donations IF you itemize. Same answer for fund-raising.

      by Judy - 12 hours ago

    • Oh, where do we begin. 1. If *I* donate $2000 to a charity, my taxes can go down by $300 (15%) because I already itemize. if I didn't itemize, the $2000 would do nothing as it wouldn't change my taxable income. 2. If I'm a business, it depends on what kind. The IRS classifies businesses as C corporations, S corporations, partnerships and sold proprietors. A C corporation may be able to claim a charitable deduction, but the other 3 can't on the business return. The donation reverts back to the personal tax return and schedule A (see #1). 3. You don't seem to know the difference on income tax deduction and tax credit. A deduction may reduce your income tax, but only by a percentage and only if you itemize and actually owe income tax to begin with. 4. When you donate your time, you get $0 deduction for it. That's because you are donating something that has $0 value. (You never included the time spent as income and even if you did, it would be a wash.) Even if you normally make money as a website designer, you still can't deduct anything because it was never income! If you paid $ to an ISP to host the web site, you *might* be able to deduct that expense....provided the charity gives you a letter confirmed that you paid it.

      by Quick Answers - 12 hours ago

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