Donations and your revenue

[suzyjazz]

How do I handle donations made from my business revenue in regard to sales tax and income tax? For example, I make $50 on photos and want to donate 10% to a adoption group. To be safe I charge sales tax on the full $50. But how do I report that $5 of that was donated and was not profit? Anyone else mess with this? Sometime this year we want to get an accountant to look over our last couple years of tax returns and then I could discuss things like this. My business income is really REALLY small.

[Charles Putnam]

They're two different accounting issues. You charge $50 + tax. The $50 is revenue (which you're taxed on) and sales tax goes to the state. The $5 donation will be part of your itimized deductions. Just make sure that you get a receipt or good documentation from the adoption group.

[Steelsun]

Yep - what Charles said.

[suzyjazz]

Thanks!

[bondarnes]

The way we have handled it in the past would be to have the client pay us $ 45. plus tax and make a check for $ 5. to the charity. This involves no paperwork on your part. In real life to make it even simpler, I have the client write the check for say half of the creation fee to the charity then the rest plus print order is mine plus sales tax.

[boxofrocks]

Originally Posted by bondarnes

The way we have handled it in the past would be to have the client pay us $ 45. plus tax and make a check for $ 5. to the charity. This involves no paperwork on your part. In real life to make it even simpler, I have the client write the check for say half of the creation fee to the charity then the rest plus print order is mine plus sales tax.

I guess the only problem there might be follow through on the part of the customer?

[bondarnes]

There is no follow through on the part of the customer. Before the session we would say, "Your creation fee today is $ 89.00, half of which we are donating to MDA. Please make a check to MDA for $ 45.00 and the balance is $ 44.00 plus $ 3.63 tax for a total of $ 47.63 and we accept cash, check, debit, or credit card. The customer gives me the MDA check which I pass on to MDA or whatever charity we were supporting.

[Steelsun]

This attorney talked about this kind of stuff recently:
http://www.photoattorney.com/2006/07...graphy-to.html