koomen@rochester.UUCP (Hans Koomen) (04/06/84)
From: Hans.Koomen
In 1983, we made substantial contributions to charitable causes. We
happen not to own our house and have few medical, childcare, or other
itemizable expenses. Even although the donations amounted to a
considerable sum, we don't quite reach the limit of $3400 and can
therefore not itemize. Hence all we can deduct is the standard
charitable donation deduction of one quarter of $100, which is less
than 5% of what we actually donated!
The questions I like answered are the following. More than half our
income is derived from a consulting business I operate (not a corp., no
employees, just your average garden-variety one-man business). Is it
possible under these circumstances to make business donations? These
would then come off the top of my business income, and not be taxed
(including the 9.6% FICA!) Or must a business be incorporated in order
to make such donations? If it is possible, can I do this retro-
actively (ie, for 1983), or is it only acceptable if those business
donations are made using my business checks?
Thanks in advance,
-- Hans ( Koomen@Rochester, {seismo,allegra}!rochester!koomen )johnson@saturn.UUCP (Mark Scott Johnson) (04/09/84)
Concerning "channeling" charitable deductions thru a business: It is my understanding that if the business is a partnership or sole proprietorship (that is, you file Schedule C), you can NOT make charitable donations in the business's name. Even if you use the company checkbook, the IRS will consider this a personal "drawing" and you can only deduct the contributions like an individual, on Schedule A. Corporations are permitted to write-off donations, but I believe they have limits that are much smaller than individuals (like 5-10%, as opposed to 20-50% for individuals), so even incorporating may not help in your case. Have you thot about buying a house instead? -- Mark Scott Johnson CSnet: Johnson@HP-Labs USENET: ...!ucbvax!hplabs!johnson