Please use this as a tax saving resource. Pass it on to your accountant. Double check that you took advantage of these tips on your taxes. I know Bakeries that went back 5 years and saved $10,000+. And all that without changing anything—except how they filed.
These credits are good for C Corps, S Corps, Sole Proprietorships, and LLCs.
Did you know you could get 100% deduction for some types of Food Donations in 2021?
tax Savings with Deductions
The Internal Revenue Code 170(e)(3) (PDF, 253 KB) of 2011 provides enhanced tax deductions to businesses. This encourages donations of fit and wholesome food to qualified nonprofits. In particular, it encourages ones that serve the poor and needy. Qualified business taxpayers can deduct the cost to produce the food. They can then half the difference between the cost and full fair market value of the donated food. In December 2015, the U.S. Congress passed the Protecting Americans from Tax Hikes (PATH) Act. This extended the enhanced tax deductions to all businesses: including C-corporations, S-corporations, limited liability corporations (LLCs), partnerships, and sole proprietorships.
The law now permits C corporations to apply an increased limit (Increased Corporate Limit) of 25% of taxable income for charitable contributions of cash. This only applies to eligible charities during calendar-year 2021. Normally, the maximum allowable deduction is limited to 10% of a corporation’s taxable income.
Again, the Increased Corporate Limit does not automatically apply. C corporations must elect the Increased Corporate Limit on a contribution-by-contribution basis.
Per IRS – IR-2021-190, September 17, 2021
WASHINGTON — The Internal Revenue Service today explained how expanded tax benefits can help both individuals and businesses give to charity before the end of this year.
Limited liability protection for donors
Businesses can temporarily deduct 100% beginning January 1, 2021
IR-2021-79, April 8, 2021
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2021-25 PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants.
Beginning January 1, 2021, through December 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances.