Taxes In America

Tax Deductions for Charitable Contributions

By July 8, 2021No Comments

 

OTB Tax is a social business. That means we give to our favorite organizations from our top line rather than the bottom line.

The top line is your revenue. So it’s all the money you made by providing a service or goods. The bottom line is your net income. So it’s all the money you made after you subtract your revenue from your expenses. Simply put, it’s your profit.

When you give to your favorite organization from your top line, you can use your profits to help those causes that you’re most passionate about!

Use your social business to create an ongoing relationship with a nonprofit qualified to receive tax-deductible contributions to take advantage of deductions and save even more while giving – it’s a win-win situation!

How do you know if a nonprofit is qualified?

You can go to the IRS website here to search. Just keep in mind that they’re behind in this process. If your nonprofit is recently established, you may want to ask them for proof.

How do you determine if a deduction is available?

Your social business can take advantage of many different tax deductions as long as you contribute in a way that aligns with the IRS definition of a charitable contribution. So what is their definition?

What is a charitable contribution?

 

Here you go: a charitable contribution is a donation or gift to or given for the use of a qualified organization that is voluntary and made without getting or expecting to get substantial benefits in return. Do you have questions about your charitable donations? Are you interested in creating a structure that enables you to own a social business?

As always, the team at OTB Tax is here to help you!

Here’s to a more relaxing and less taxing way to own a social business and change the world for the better while doing what you love!