Legal Implications of Donating % of Sales

[Aminka Ozmun]

I read in the current issue of "Runner's World" about a homeless athlete's determination to help homeless orphans in Uganda, and it really touched me imagining children as young as three years-old sleeping on the streets.*

That got me thinking...if a homeless athlete can do it (he was working as a high school coach or something and sleeping on the grounds), why can't I?

So I started thinking of what I could do, and then I remembered all these businesses that would donate a percentage of sales or profits to charity. So I'm going to do the same!

For my upcoming copywriting services site, I plan on donating thirty percent of every hundred dollars above an initial one hundred of a single order (hope that makes sense!)...for a two-hundred dollar order it's effectively fifteen percent of the total; for a three-hundred dollar order it's effectively twenty percent -- and so forth. Sounds good?

I also have in mind something similar for my upcoming eBook site (any ideas??), but anyway, thing is, what are the legal ramifications? Like, I dunno, reporting things to the government, special tax forms, etc.

I was going to contact some established charities, such as the ones I plan on donating to (I'll compile a list and let the customer decide), but then I thought to ask here first because these forums are big on "giving" and making money at the same time....

TIA!!




*I know we have needy cases here too, and my list of charities will address these as well.

[dogstar]

The official "professional" response is to check with your accountant for appropriate reporting requirements.

In general though, as long as you are not writing off a free "service" as a donation (you can't do that per the IRS - only inventoried products and cash can be donated) your cash donations after the sale of your service would then be written off as charitable donations against your taxes.

[just jr]

they aren't any legal ramifications as long as you can prove that the company you donated the money too is real ( ie tax identification number/social security card) also donations are a tax write off. just report the donations on the Schedule C like you would any other earnings, losses or expenses. if you are running a LLC or C corp and not a sole proprietorship then you would need to file it with those returns but the basics are the same

and yes you should still reach out to your accountant/tax specialist

[Aminka Ozmun]

Thanks for the thoughts, guys!

Yes, I'll check with the accountant when it comes to that, but it's nice to know right now that this isn't going to be anything complicated at all!