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Level 1

Report Now and Pay Later

Each month our small business gives a small percentage of our profits to various charities.    This process is straightforward as we write a check against our charitable contributions account.  This appears correctly on our monthly PL report.

 

Our question centers around when we want to roll the contributions over for several months.  We would like for the amount to show up on each months PL report even though the check might not be written for a couple of months.  How do we properly do this?

 

Example:

Jan: $500

Feb: $500

Mar: $500

 

If we wrote the $1500 check in March we would like for all three months to show $500 charitable contributions on the monthly PL reports instead of nothing in Jan & Feb and $1500 in March.

1 Comment
Highlighted
Level 15

Report Now and Pay Later

This is the error: "This process is straightforward as we write a check against our charitable contributions account.  This appears correctly on our monthly PL report."

 

Only a C Corp has Charitable Expense on the tax form (1120). So, no, you are not tracking and reporting this properly.

 

This is income to you. This concept: "Our question centers around when we want to roll the contributions over for several months.  We would like for the amount to show up on each months PL report even though the check might not be written for a couple of months."

 

Simply means you intend to keep the business income in the business.

 

Then, any Giving is first, a regular removal of business funds from Banking, such as Owner Draw, which is from Equity and never on the P&L. The Giving, then, is personal charitable giving, part of the 1040.

 

You really need to run this past your CPA. This is not how to manage "giving."

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