Tis the season for charitable giving – aka, charity donations. If you want to give back to those who aren’t profiting like you are, your business should consider giving a percentage of your profits to a charity of your choosing. There are plenty of worthy charities that could use some help. PayTech is here to convince you that giving is a good thing, even if it’s only for tax reasons.
About three-fourths of small businesses donate a portion of their profits, generally giving about 6 percent to charities. So, you are definitely not alone in doing this. What you might be wondering is, how does a charity donation impact the bottom line in tax deductions? Before anything else, you will want to find the right charity and avoid situations that could leave you tied up.
Before just choosing whatever charity you know about, do some research. Only particular contributions qualify for a tax deduction. If getting a tax benefit is part of your goal, look into the charity you are considering. Look at other potential perks like how the donation lines up with your company’s PR strategy.
When you think about your intention with charity giving it opens up an opportunity to show that you’re giving back to your community to future customers and even employees. Consumers look at companies who are charitable with a more positive image. Even your employees are more likely to stay with you for the long haul if they feel good about your company’s philanthropic doings.
Again, not every organization will qualify. If you follow these guidelines and consult your accountants and/or tax attorney, you should receive your credit.
When you are considering charity donations, it is always important to determine your strategy, research the right organization for your business, and to follow the IRS guidelines. PayTech realizes that your reasoning for generosity may be the tax benefits, but have some heart this holiday season and do it for the charity. If you are not understanding all of this and need some more help with your accounting and tax services, HR Support, or payroll, visit our Contact page or give us a call.