Many businesses in the U.S. are working within their communities without any care over whether they are given a tax deduction for their charitable gifts. Sam Haskell is a long-term charitable donor who has been navigating the issues facing businesses and individuals as they give to charity and try to remain within the rules of the IRS. There are different rules and regulations in use for companies depending on their size and makeup that allows certain limits to the money being donated and claimed as a deduction on taxes.

Business Versus Personal Taxes

There is a difference between the number and amount of deductions you can make as an individual or as a business. As an individual, Nerd Wallet reports a person can make an impact on the charitable organizations of the world and claim back a large amount as tax deductions. The rules and regulations from the Internal Revenue Service explain the theory of the tax code is that around 60 percent of the charitable gifts made can be deducted as part of your itemized deductions. In theory, the tax code allows certain individuals to claim back specific levels of their charitable gifts as deductions, ranging from 20 to 50 percent.

Business taxes can include charitable deductions made to charities that are registered with the IRS for all forms of companies. However, the rules and regulations for the businesses can be different depending on whether the owners of the organization are registered as a sole proprietor, a partnership, or as some form of an incorporated company.

What can and Cannot be Deducted?

The first step to take if you are making a charitable donation and hoping to make a deduction is to ensure you are aware of which gifts can be made and placed on an itemized deduction list. In general, the main charitable gifts that are made and deducted from taxes include:

• Cash
• Property
• Tracel Expenses

These are the main areas that can be deducted in the latest tax codes, meaning the time given to community service cannot be claimed back as a tax deduction. It is always worth talking to a tax professional about your taxes because you may be able to deduct certain other cash payments even if they are not made to a registered charitable organization, according to The Balance.

Sole-Proprieter Business

The number of sole-proprietor companies is growing around the world as more people begin working for themselves using the Internet as a way of attracting business to their company. As a sole-proprietor, you will be able to deduct your charitable gifts as part of your schedule A when you choose to claim an itemized deduction on your taxes. In the sole-proprietor business, you will not be able to deduct any charitable giving as part of schedule C, but you will be able to complete your deductions to certain limits set by the IRS, according to Fox Business.

Multiple Partners LLCs

This is when the tax code becomes difficult to understand with partnerships and multiple-member LLCs causing major issues around the U.S. When registered with the IRS as a partnership, each member of the partnership will be given the chance to claim a percentage of the deduction because the partnership itself does not pay income taxes. If each of the members of the partnership agrees to the charitable gift they can work together to decide how much of the gift is provided for each person in the partnership to deduct on their taxes. Both a partnership and the members of an S Corporation are given the same deduction options provided on the Schedule K-1 line on your taxes.

C Corporations

A corporation can also take deductions for their charitable gifts that will be claimed in a similar way to those made through the tax forms made available through the IRS. A tax deduction can be claimed by a corporation using form 1120 with the rules and regulations changing each year with the limits changing with the introduction of the 2017 tax code changes.

The Correct Information is Needed

Sam Haskell recommends asking a few questions when you are going to contribute to a charity, including making sure the charity is registered with the IRS to allow you to make a deduction. If you are looking to make a tax-deductible contribution you should always ask for a receipt from the organization you are providing the gift of cash or property for.