Writing Business: Writers and Charitable Contributions by Gary Hensley

On the first Monday of each month, Gary offers advice regarding the business side of writing.

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Gary Hensley picI know what you’re thinking.  People should be giving you money to support your writing endeavors.   However, for those that can give to charity, I want to clarify how that is handled when you are self-employed in the publishing arena.

First, you need to know that donations of your time and effort to any charity are not deductible.  Next, if you are an unincorporated business, using Schedule C at the end of the year as a sole proprietor, you cannot claim a deduction on Schedule C for any cash or property contributed to a charity (even if you wrote the check out of your business account).  A donation to a charity out of your business checking account functions as a nondeductible owner’s draw.

However, you can take the donations from your business account and your personal accounts (including donations via credit card) and combine them and take the entire amount on Schedule A – Itemized Deductions on the charitable contributions line.  Charitable donations from your business account are not deductible business expenses but they are included as part of your overall charitable giving on Schedule A.

When your business donates to a worthy cause, with cash or property (for example, a used computer), it not only helps the community (local, national, or international) but, if donated in the business name, also gives your business added visibility and good public relations.

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Gary A. Hensley is a 35-year veteran in accounting, auditing, and federal taxation including employment as a Revenue Agent with the IRS (2005-2011). He has been a workshop instructor on the business side of writing. Publications include: Writer’s Digest, Christian Communicator, and Writers Journal. Gary writes at: www.taxsolutionsforwriters.com.

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