Your limited liability company pays taxes like a partnership. The LLC itself has no taxable income as far as the IRS is concerned. Instead, you and your fellow owners divide expenses and income and report it on your personal returns. An LLC can give money to charity but it can't usually take a write-off.
Business Donations
C corporations are the only business structure that can take a tax deduction for donating to charity. Sole proprietorships, S corporations, partnerships and LLCs can donate cash or assets, but they don't get a tax write-off. Instead, the business owners have to report the donation as a personal charitable deduction. If you donate your business's services, you can't take a write-off at all. The IRS says volunteering time or a service doesn’t qualify for a tax break.
Paying for Services
Your company may be able to take a deduction if it gets something in return for its money. For example, if you buy an ad in a program for a church concert, it doesn't matter if your motives were charitable, since advertising is a deductible business expense. Giving money to your trade association or the local Chamber of Commerce to promote your industry or local business in general is also a legitimate business deduction.
Taking the Deduction
To claim the write-off, you and your fellow LLC members divide the donation like any other business expense. Say the LLC has four members and you divide all income and expenses equally. If the company contributes $5,000 to a local food bank, you can each take a $1,250 write-off, provided you itemize on Schedule A. Anyone who doesn't itemize doesn't get to take the deduction, but the other members can still take the write-off.
Considerations
You only get the write-off if the organization qualifies for tax-deductible donations. Its representatives can tell you if it qualifies, or you can use the IRS' online tool for identifying groups. The most you can write off in a given year is 50 percent of your adjusted gross income. With some organizations, the limit is 30 percent. Keep receipts and records to prove the value of your donation, particularly if you're donating inventory items or something other than cash.
References
Resources
Writer Bio
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.