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Donations as a business expense

cascadadeflorescascadadeflores Member Posts: 1

Hello! I wonder if anyone has come across this: I am using wave for a small business owned by my husband and I, we are a band. Last year we donated income from a concert to two organizations, one for the fires in sonoma and one for earthquakes in Oaxaca. I cannot find a category for donations. I wonder if there is any way to deduct this on our schedule C, and how to organize them in Wave?
Thank you so much!
Arwen

in Accounting Technical Support

Comments

  • Ryan_WRyan_W Member Posts: 452 ✭✭✭

    Hey @cascadadeflores,

    Great question! I recommend adding an expense account specifically for organizing and tracking your donations. You can do this by clicking Accounting > Chart of Accounts > Add an Account, and then naming it Charitable Donations. Then, you can assign your donations to this account by selecting it from the Category dropdown menu in the Transactions page when you're reviewing your books!

  • FAWFAW Member Posts: 3

    What account type would you use? as none seem to fit.
    The choices are Operating Expense, Cost Of Good Sold, Payment processing Fee or Payroll Expense.
    Can I add a new Account Type?

  • MikegMikeg Member Posts: 995 ✭✭✭

    FAW,
    Operating Expense. Depending on how the business is structured for tax (speaking only to US) will dictate how it is shown on the return. Charitable are not a business expense for S-Corps, partnerships, LLC's or proprietors. They go to the owners Form 1040 Schedule A.
    Mike G, CPA
    www.mgfinancial.net

  • austrikeraustriker Member Posts: 1

    @Mikeg said:
    FAW,
    Operating Expense. Depending on how the business is structured for tax (speaking only to US) will dictate how it is shown on the return. Charitable are not a business expense for S-Corps, partnerships, LLC's or proprietors. They go to the owners Form 1040 Schedule A.
    Mike G, CPA
    www.mgfinancial.net

    Hi Mike/anyone else-
    so I have a single member LLC, what category should I use for a donation in waveapps?

  • MikegMikeg Member Posts: 995 ✭✭✭
    You can put it as an operating expense. For tax purposes though it is not a deduction on Schedule C where single member LLC’s report. It would go on Schedule A.
    Hope that helps.
    Mike G, CPA
    www.mgfinancial.net
    Affordable Solutions For
    Your Small Business
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