Is Charitable Contributions Allowed on Schedule C ?

schedule CCan You Deduct Charitable Contributions on Schedule C Business? is one of the most often asked question by people involved in sole proprietorship business .The answer is short “NO” , but as is the case with most tax clauses, there is a good chance that contribution to a charitable organization can not be outright rejected by the Internal Revenue Service that usually not allow such expenditure from profit out of self employment businesses, provided you prove that it was made for business purpose.

What is Schedule C ?

Schedule C is part of individual tax Form 1040 . Now there is some special purpose of this Schedule to be part of Form 1040 . If you had self-employment income, this schedule must be completed and included with your income tax return . In most cases, people who fill out this schedule will also have to fill out Schedule SE, “Self-Employment Tax.”
Thus , this schedule allows self employed or proprietorship business owner to report profit & loss of their business. You can also use Schedule C to report (a) wages and expenses you had as a statutory employee, (b) income and deductions of certain qualified joint ventures, and . If you read the schedule c instructions ,you will find that IRS advises against deduction of any charitable contribution.

Charitable Contribution

Under Internal Revenue Code, a business owner can deduct all the expenses that was incurred for earning business income. Now from that perspective , you will have to see the issue of allowance of charitable contribution . For example , say you are a having a flower shop in the locality  if you spend $100 to buy an ad in the program organized by the church , you can deduct that expense on Schedule C explaining the expenditure as a necessary expense for your business.

Plain and simple charitable donation is not allowed on Schedule C. You can read more on this from irs guide

 

1 Comment
  1. […] organization . Then it was also explained that in general charity donation will not give you tax deduction on Schedule C i.e self employed business profit. Now , let us come to one of the most important procedural aspect […]

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