cable_stacy Posted January 10, 2006 Share Posted January 10, 2006 I have a question. I was asked to donate a few candles to our local hospital to go into a basket that will be used as a prize. This prize will be used for a charity the have. Ok, I am happy to donate the candles..........but where does that fall into my paperwork? Do I need to file anything on it? Very new and very lost here........I just recently started selling! Thank you to anyone who can help. Quote Link to comment Share on other sites More sharing options...
Suzanne Posted January 11, 2006 Share Posted January 11, 2006 As long as you don't recieve anything in return for the donation it is considered a donation. What I mean is, if you get something like a discount, gift certificate or anything at all for donating it's not a donation. Keep a record of it for when you do your taxes. HTH Quote Link to comment Share on other sites More sharing options...
pdevine Posted January 11, 2006 Share Posted January 11, 2006 I've done this several times and I just make "myself" up an invoice showing to who and what was donated and amount and keep it for my records/taxes. HTH Portia Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 As long as you don't recieve anything in return for the donation it is considered a donation. What I mean is, if you get something like a discount, gift certificate or anything at all for donating it's not a donation. Keep a record of it for when you do your taxes. HTHBut.... you can NOT deduct it on your taxes as a contribution, because you ALREADY will have deducted it when you deduct your supplies you used to MAKE the candle and or product.... you cant deduct it twice. Bruce Quote Link to comment Share on other sites More sharing options...
Suzanne Posted January 11, 2006 Share Posted January 11, 2006 Actually, you won't be deducting it twice. Without getting into to much detail so it's easier to understand, when you make a product, your inventory and raw materials accounts are adjusted. You don't "deduct" something on your taxes. Donations are deductable as long as they are within certain federal and state guidelines. Quote Link to comment Share on other sites More sharing options...
sudsnwicks Posted January 11, 2006 Share Posted January 11, 2006 So...we just have to track it for our own records, and don't need to account for it anywhere else because it comes out in the wash (gets deducted together with the ingredients used for actual sales), right? Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 Suzanne Thats not my understanding of how it works. I was told if you make the product, you are listing your supplies and sales ect to get your business profit, now if you donate cash, thats one thing, but since you already have your products cost figured in, when you donate product... its just like a loss of profit since you dont have it on inventory yet you have claimed its cost. If your way is true, does your donation have to show the retail value or the cost... which the cost you have already taken into account anyway? How would irs know if your retail value is inflated just to make a donation seem larger than it is? Your turn.... come on and splain it to me. I hope your way is right, but I had been told by one of my candle suppliers that also worked with taxes for years that you can't claim donated product like that. I dont have a problem with being wrong, I just want to know whats right for sure. Bruce Quote Link to comment Share on other sites More sharing options...
Suzanne Posted January 11, 2006 Share Posted January 11, 2006 Sorry Bruce but I'm afraid you've been misinformed. I don't really want to tell you what to do but you can't expect a candle supplier to be able to inform you properly unless of course, they are also an accountant. Taxes and accounting isn't something anyone can pick up on and everyone or every company does it the same way. There are many laws and regulations and such that accountants have to follow and inform their clients on. Donations is always a big issue as this changes all the time. I can't just tell you how to do it without looking at all the factors. If you use an accountant (and you should) to do your taxes they'd be able to tell you. But it's not just a simple issue. You can always send me your books and I can take a look at them and tell you exactly how to handle it, but I'd have to charge you. Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 LOL Clear as mud Thanks Quote Link to comment Share on other sites More sharing options...
Suzanne Posted January 11, 2006 Share Posted January 11, 2006 LOL Sorry Bruce, but it's not that easy. That's why there are accountants.Edited to add for Stacy: If the fair market value of your non-cash donation/contribution is less than $500 you don't have to include an additional form with your taxes. Quote Link to comment Share on other sites More sharing options...
BruceCarvesWax Posted January 11, 2006 Share Posted January 11, 2006 That's why there are accountants. ....and your one of them, or a cpa, right? Quote Link to comment Share on other sites More sharing options...
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