TAX Savings

March 3, 2022
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Tax Deductions

Please use this as a resource and pass on to your accountant. You may want to questions if all of these opportunities were fully used in your taxes. I have know Bakeries that have gone back 5 years and saved 10’s of thousand of dollars FOR WHAT THEY WERE ALREADY DOING.

The credits. They are good for C Corps, S Corps, Sole Proprietorships, LLCs

Did you know you could get 100% deduction for some types of Food Donations in 2021? See below

A Donor’s Guide to the Enhanced Federal Tax Deduction for Food Donation

Food Donation Federal Tax Guide

Enhanced tax deductions

The Internal Revenue Code 170(e)(3) (PDF, 253 KB) of 2011 provides enhanced tax deductions to businesses to encourage donations of fit and wholesome food to qualified nonprofit organizations serving the poor and needy. Qualified business taxpayers can deduct the cost to produce the food and 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, making permanent and extending 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 they make 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

The Bill Emerson Good Samaritan Food Donation Act of 1996

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.

More information for businesses seeking coronavirus related tax relief can be found at IRS.gov.

When it is all done,

https://www.nrdc.org/sites/default/files/food-donation-federal-tax-deduction-guide-201803.pdf

https://chlpi.org/wp-content/uploads/2013/12/Food-Donation-Fed-Tax-Guide-for-Pub-2.pdf