When a family child care provider makes a donation to her church, synagogue, or mosque she can claim this as a charitable deduction on IRS Form 1040 Schedule A Itemized Deductions. Likewise, with contributions of used clothing, toys, furniture, etc. to charitable organizations such as Goodwill or the Salvation Army,
Charitable contributions are not, however, deductible as business expenses.
If you buy an ad in a newsletter or a special event program for a charitable organization you can deduct this as a business advertising expense. The same goes for paying money to sponsor a baseball or soccer team. In fact, any advertising for your business is deductible, whether or not the organization is a charity.
If you buy candy, stationery or other stuff from school fundraisers you cannot deduct this as a charitable contribution because you are receiving items rather than making a cash donation.
Parents who give you gifts of money, toys, supplies, furniture, etc. cannot claim a charitable contribution on their personal tax return. If you hold a fundraiser and parents buy stuff from you, they also cannot deduct this as a charitable contribution. This is because you are not a qualified charitable organization. (Although it may feel sometimes like you are!)
See also my article, “What’s Not Deductible.”
Tom Copeland – www.tomcopelandblog.com
Image credit: https://www.flickr.com/photos/jeepersmedia/
For more information about what is deductible as a business expense, see my book Family Child Care Record Keeping Guide.