Tax Deductions. Charitable Donations

Corporations can deduct charitable contributions up to 10% of their taxable income. In order to be tax deductible, the contribution must be in cash and be to a qualified organization, typically a 501(c)3 tax exempt non-profit organization. For example, a XYZ corporation donated $10,000 to ABC non-profit in 2023. Their taxable income (gross income - business expenses) in 2023 is $60,000. 10% of it is $6,000. Therefore $6,000 out of $10,000 contributed to ABC can be deducted on XYZ’s 2023 tax return. the remaining $4,000 can be carried forward to future years.