• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to secondary navigation
  • Skip to primary sidebar
  • Skip to footer

Before Header

Client Portal            |

Email: evan@evanhcpa.com

Evan Hutcheson CPA LLC logo

Nashville Cpa

  • Home
  • About
  • Services
    • Tax Preparation Services
    • Bookkeeping Services
    • Payroll Services
    • Virtual CPA Services
    • Escape the Rat Race with Confidence and your Business Intact
  • Testimonials
  • Contact Me
  • Blog
  • Tutorials
  • Home
  • About
  • Services
    • Tax Preparation Services
    • Bookkeeping Services
    • Payroll Services
    • Virtual CPA Services
    • Escape the Rat Race with Confidence and your Business Intact
  • Testimonials
  • Contact Me
  • Blog
  • Tutorials
  • Home
  • About
  • Services
  • Testimonials
  • Contact Me
  • Blog
  • Tutorials

Donating to a Charity? Ask Your CPA About Potential Tax Benefits

October 22, 2019 //  by Contributor

Donating to charity is an American tradition, especially during the holidays. If you’re a business owner, it might even be a great way to reduce your tax bill. In Nashville, there are numerous nonprofits that qualify for tax deductible donations.

Ask Your CPA About the Potential Tax Benefits of Charitable Donations

With the passing of the Tax Cuts and Jobs Act of 2017, however, getting tax write offs for charitable contributions has become more complicated. Consult with a Nashville CPA to find out if tax deductible contributions make sense for your company.

Under the new law, there are a few things you need to consider.

1. The charity has to be a qualified tax-exempt organization

To assure you get tax benefits from your charitable contribution, donate to a 501(c)(3) organization. However, certain entities are not required to register for a 501(c)(3) status, including churches, religious organizations, and some trusts, but are nonetheless qualified to receive tax deductible contributions. To find eligible Nashville nonprofits or to check if an organization is qualified, you can use this IRS tool.

2. Your business structure determines how tax deductions are applied

How your business is structured plays an important role on how you can realize charitable tax deductions.

  • C corporations: As an individual entity, a C corporation is the only type of business that can directly deduct a charitable contribution from its taxable income. The tax deduction can be as much as 21% of the donated amount, as long as the corporation’s total deductions do not exceed 10% of its taxable income.
  • Sole proprietorship, partnerships, and S corporations: As pass-through entities, business taxes for these types of organizations are passed on to the owners’ personal taxes. In an S corporation or partnership, the owners’ individual tax deductions are determined by the amount of their share in the contribution.Under the new law, you can itemize the deduction on your income tax return as before. However, if you opt for the standard income tax deduction, you may not deduct your charitable donations for the same year. You need to do the math to determine whether itemizing your deductions or taking the standard deduction gives you greater benefit.

3. What donations are tax deductible?

There are three basic types of tax deductible contributions:

  • Cash: You can choose to give cash to many different organizations, or select only a few with a mission that’s aligned with yours.
  • Equipment, inventory, and property: If you donate excess or old inventory, supplies, and equipment, the deductible amount depends on the fair market value of the items you’re donating, as well as the type of organization you’re contributing to.Property can be real or intellectual. Its value needs to be appraised to determine the amount of tax deduction
  • Volunteer expenses: If you volunteer your employees to help in a charitable event or service, their salaries and wages may be tax deductible. Any expenses you incur for the volunteer work, such as travel and meal allowances, may also be deducted.

Consider the non-financial benefits of charitable contributions

With the higher standard deduction on income taxes under the Tax Cuts and Jobs Act, small businesses may find they get less tax benefits from charitable contributions. However, being actively involved in a charity can be rewarding in many other ways. It enhances your business’s reputation in the community, boosts employee morale, and helps you achieve your business mission. To many, these intangible rewards are more valuable than any tax benefit.

Review your options with your CPA to get the most out of your philanthropic donations.

Sources:

Tax-Deductible Donations: How Do Tax Deductions Work?, AmericanExpress.com
How to Deduct Charitable Donations, TheBalancesMB.com

Share this:

  • Click to share on Facebook (Opens in new window) Facebook
  • Click to share on X (Opens in new window) X
  • Click to share on LinkedIn (Opens in new window) LinkedIn
  • Click to share on Tumblr (Opens in new window) Tumblr

Related

Category: Nashville CPA

Previous Post: «Get Help from Your Accounting Firm About Reducing Your Tax Burden Ask Your Accounting Firm About Tax Strategies for Your Small Business
Next Post: Investing in Nashville Real Estate? Here’s How a CPA Firm Can Help You A CPA Firm Can Help Maximize Your Profits from Real Estate Investments»

Primary Sidebar

Article Categories

15 of the Most Overlooked Tax Deductions Click the button to get your free guide to commonly overlooked tax deductions.

QuickBooks ProAdvisor

QuickBooks Certified Pro Advisor

FUTRLI Certified Advisor

FUTRLI  Partners: Certified Advisor

Footer

Contact Information

Evan Hutcheson, CPA, LLC
1621 5th Ave N
Nashville, TN 37208
Phone: 615-727-2295
Fax: 615-581-7706
email: evan@evanhcpa.com
Hours: 8 a.m. to 6 p.m. Mon~Fri
URL of Map

Follow Me

  • Facebook
  • X
  • LinkedIn
  • Instagram
  • YouTube
  • Pinterest

Proud Member of:

Tennessee Society of CPAs
Construction Financial Management Association
Thriveal CPA Network

Location

Click to open a larger map

  • Home
  • About
  • Services
  • Testimonials
  • Contact Me
  • Blog
  • Tutorials

Privacy Policy · Disclaimer · Terms of Use · DMCA Notice
Copyright © 2025 · Evan Hutcheson, CPA, LLC

 

Loading Comments...