In 2012, we donated a considerable amount in services to one of our
clients who has a 501-C. We did this by charging them the full amount
then giving a huge discount on each invoice. I am now understanding
that this discount is just a loss to us as we cannot itemize these
donated services for taxes as ab s-corp.
This year, is it possible to give this client a cash donation each month, then charge them the full amount of services rendered on each invoice? It would be basically giving them money that they would turn around and pay us with. And, if we did this cash donation, would it help us any to itemize the charitable contribution on our personal taxes (as a pass-through) when we are now also having to show the full amount of services as income to the corp?
Any ideas HOW we can help this non-profit client but not hurt our corporation in the process?? Thanks.
Answer :
#1; With tighter budgets, many charitable organizations are having a tough time affording their contractors. Tax laws provide little incentive for volunteers to step in, as charitable services are not tax-deductible, regardless of the service rendered. Alternative options for you who wants to help include performing a paid service for someone else, then donating the money to the charity; or building an item, donating it and deducting the fair market value of the item. The IRS does allow the following to count as charitable deductions;
Since S corp is a "pass-through" entity, the deduction for the charitable contributions of S corp also passes through to the personal income tax returns of the S corp ownership. Each shareholder can then claim a pro rata share of the corp's Visit As Know More Here...
This year, is it possible to give this client a cash donation each month, then charge them the full amount of services rendered on each invoice? It would be basically giving them money that they would turn around and pay us with. And, if we did this cash donation, would it help us any to itemize the charitable contribution on our personal taxes (as a pass-through) when we are now also having to show the full amount of services as income to the corp?
Any ideas HOW we can help this non-profit client but not hurt our corporation in the process?? Thanks.
Answer :
#1; With tighter budgets, many charitable organizations are having a tough time affording their contractors. Tax laws provide little incentive for volunteers to step in, as charitable services are not tax-deductible, regardless of the service rendered. Alternative options for you who wants to help include performing a paid service for someone else, then donating the money to the charity; or building an item, donating it and deducting the fair market value of the item. The IRS does allow the following to count as charitable deductions;
Since S corp is a "pass-through" entity, the deduction for the charitable contributions of S corp also passes through to the personal income tax returns of the S corp ownership. Each shareholder can then claim a pro rata share of the corp's Visit As Know More Here...
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