December 8, 2017
Charitable Giving: Quick Tips for Claiming Tax Deductions
by Victoria Stephenson, Benesch Friedlander Coplan & Aronoff LLP
The holidays are a time of giving; a time when many businesses want to do their part to make an impact in their community.
To do so, your business may consider making a gift to a charitable organization. To take advantage of the available tax deduction, one of many benefits of making a charitable gift, consider the following:
- Charitable gifts must be made before December 31.
- Gifts must be made to a qualified organization. Search the “Exempt Organizations Select Check” tool provided by the IRS to determine if an organization is qualified.
- Generally, contributions of money or property are deductible if not set aside for a particular individual’s use. Consult your tax advisors to determine the proper value of contributed property to be deducted.
- For a cash contribution of any amount, the business must keep a bank record or receipt from the organization showing to whom the contribution was made, its amount and the date made, or payroll deduction records that comply with IRS requirements.
- For a contribution of $250 or more, the business must receive an acknowledgement from the organization that complies with IRS guidance on substantiating charitable gifts.
- If a benefit is received from an organization in return for a charitable gift, you may deduct the amount of the gift, less the value of the benefit received. For large corporate sponsorships, consult your tax advisors to determine the type of deduction the sponsorship will be considered.
The rules for claiming a tax deduction available for charitable gifts are extensive and dependent upon each set of circumstances. To properly claim a deduction, retain all related documentation and consult with legal counsel or your tax advisors.