Are Charitable Donations Tax Deductible for a Business?

Sole proprietors and pass-through entities

If you're a sole proprietor, partner, LLC member, or S-corp shareholder, charitable donations go on your personal return:

• Cash donations: deductible up to 60% of AGI on Schedule A
• Property donations: deductible at fair market value, with varying AGI limits
• Must itemize deductions (not use standard deduction)

You cannot deduct charitable donations on Schedule C. The IRS is very clear about this.

C-corporations

C-corps can deduct charitable contributions on the corporate return (Form 1120), up to 10% of taxable income. Excess can be carried forward 5 years.

Sponsorships vs. donations

Here's a useful distinction: if you sponsor a local charity event and get advertising in return (your logo on the banner, a booth at the event), that's advertising, not a donation. Advertising is fully deductible on Schedule C with no limits.

If you donate $1,000 to a charity with no expectation of advertising or return value, that's a donation and goes on Schedule A.