The Amount that can be Written Off on Taxes

As you talk to donors about giving to your nonprofit, you will most likely get many questions. A popular question may be the donor wanting to know precisely how much they can write off on their taxes. Here are a few general guidelines that you may find helpful.

Individual Donations

An individual may generally deduct up to 50% of their adjusted gross income to a charitable organization. If a person donates more than 50% of their adjusted gross income, the excess may be carried forward for five years.

Business Donations

If a business makes a charitable donation, the IRS will generally classify it as a personal expense. The corporation cannot deduct it as a business expense. Instead, the IRS views the gift as an itemized tax deduction. Again, the business should consult with a certified public accountant. A CPA can find out how to maximize tax benefits relating to the gift.

As a general rule, you can let donors know that donations to your charity are 100% tax-deductible to the fullest extent of the law. However, you must make sure that you have obtained your 501c3 tax-exempt status from the IRS. I advise that you still encourage donors to consult with their accountant regarding the specific tax benefits they are eligible to receive since the tax code changes every year. Unless you are a tax professional, you don’t want to be held responsible for giving them inaccurate information. You can also find more information on the IRS’s website about charitable donations.

If you have any questions about talking with donors or receiving donations, don’t hesitate to call us today to schedule your free consultation. At Chisholm Law Firm, we have a 100% success rate for our clients. You can rest assured that your nonprofit is in the best hands and that we’ll get everything done right the first time. 

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