Charitable Contributions Made by Your Business
Your business may contribute cash or property to various charities. In general, the amount of your charitable contribution is deductible, but there are certain limits and requirements that must be followed. Donations of your time and effort are not deductible.
Charitable giving and other activities can be a business plus even if no deduction is allowed. For example, donating items for which no deduction is allowed (as explained later), such as a fully depreciated computer or cell phone, can still benefit a charity and the people it serves. While you cannot deduct the value of your time spent when serving on a board of a nonprofit organization (you can claim only a personal charitable contribution deduction for your out-of-pocket expenses), you not only serve a cause but also gain visibility and make important connections in your community that can benefit your business in the long run.
Individuals can deduct charitable contributions only as itemized deductions. For example, if you are a partner and the partnership makes a charitable contribution, the contribution is passed through to you as a separately stated item and you then deduct it on your Schedule A as an itemized deduction. The same is true for members of LLCs and shareholders in ...