Tithes

SJMonroe

I tithe off of my business income and it, of course, appears on my bank statement. When doing a Reconciliation, it shows as a business expense, but is NOT a business expense. Any suggestions on how to handle this transaction when doing Reconciliation? Should I just move the amount to my personal account & then tithe?

Mikeg

@SJMonroe,
Even though you may not equate a charitable contribution as a business expense it should still presented in either one of two places. As an owners draw or on the income statement under an operating expense. For my clients, we put charitable donations on the income statement. Depending on the the type of entity, it is presented on the tax return accordingly. So for a Schedule C it would go to Schedule A, partnerships and S-Corps, Sch K and C corps page 1.

SJMonroe

Thank you. As an operating expense, it becomes a tax deduction, right? Don't have enough Schedule A deductions to use that form.

Mikeg

@SJMonroe,
If you are filing a Schedule C with your personal, then charitable is presented on Sch A and not a deduction on Schedule C. This year there is an above the line deduction of up to $300 for charitable if you cannot itemize.
It is still okay to have in Wave because if the contribution went through your business bank account, it needs to be presented somewhere. As I mentioned before, either owners draw or business expense.