Charitable contributions are reported in different ways depending on your tax entity type.
If you're a sole proprietor OR file your business profit in your personal tax return:
- Charitable contributions are now only reported on Schedule A Itemized Deductions.
- If you are taking the Standard Deduction, you will not be able to claim your charitable contributions.
- This is a change for the 2022 tax year. The IRS had previously allowed taxpayers a $300 standard charitable deduction in 2021 ($600 if Married Filing Joint). They removed this and are now only allowing a charitable contributions deduction if you are itemizing your deductions.
If your business is an S corporation:
- All charitable contributions will be reported on your personal tax return.
- The Schedule K-1 (which reports all income earned by the S corp) will include the amount paid by the business during the tax year and report those amounts in Box 12 with a code A-G.
- When you file your personal tax return, the charitable contributions amount will be included in your itemized deductions (if you itemized).