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> Do they also claim tax write-offs for your donations? Yes, but not in the "We pay less taxes because of this" way that people think. Businesses are not allow

> Do they also claim tax write-offs for your donations? Yes, but not in the "We pay less taxes because of this" way that people think. Businesses are not allowed to take charitable deductions for donations made using funds collected from customers for the stated purpose of donating funds to a charity (i.e., "round up for charity"). The money being donated is not the business' money to donate, ergo they are not the party making the donation and do not get the tax benefit of it. Technically, the customer gets the deduction, but for donations of a few bucks its not worth it for the business or the customer to bother with the donation receipt. Note that this does depend on the language of the solicitation. If they say "we'll donate" they can take the deduction, but they must also gross up their own revenue to include the "donated" funds, so they get no tax benefit.

Sohcahtoa82 4y ago
Did you read the rest of my message, or did you see that first line and stop there? We're in agreement.
- gamblor956 4y ago
  We're in partial agreement. I only agree to the extent that the business says that "we" will donate on the customer's behalf, rather than (as in the case of most of these situations) saying that the customer is donating through the business. In the first case, the business gets a deduction because it records these deductions as revenue and is making a donation out of that revenue. That's where we agree, but this is the exceptional case, not the norm. In the second case, which is the common case (i.e., round up for charity see for example https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...), the business does not get a deduction for the donation, but also does not record these donated funds as revenue because it is only acting as a collections agent for a charity.

Sohcahtoa82 4y ago

Did you read the rest of my message, or did you see that first line and stop there? We're in agreement.

gamblor956 4y ago
We're in partial agreement. I only agree to the extent that the business says that "we" will donate on the customer's behalf, rather than (as in the case of most of these situations) saying that the customer is donating through the business. In the first case, the business gets a deduction because it records these deductions as revenue and is making a donation out of that revenue. That's where we agree, but this is the exceptional case, not the norm. In the second case, which is the common case (i.e., round up for charity see for example https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...), the business does not get a deduction for the donation, but also does not record these donated funds as revenue because it is only acting as a collections agent for a charity.