Generally, the total amount claimed cannot be more than 10% of taxable income (line 30) computed without regard to the following.

• Any deduction for contributions.

• The special deductions on line 29b.

• The limitation under IRC Sec 249 on the deduction for bond premium.

• Any net operating loss (NOL) carryback to the tax year under IRC Sec 172.

• Any capital loss carryback to the tax year under IRC Sec 1212(a)(1).

• Deduction for income attributable to domestic production activities of specified agricultural or horticultural cooperatives.

Note: For 2020 and 2021 (because of COVID) the limitation was increased to 25% for cash contributions.

Charitable contributions over the 10% (or 25%) limitation can be carried over to the next 5 tax years. There are other special rules; see the 1120 instructions.

Because these entities are passthrough, any contributions made at the entity level are passed through to the partner or shareholder and are subject to limitations at the individual level.

If a Schedule C business pays an amount to a qualified non-profit organization for the purpose of business promotion or advertising, it can generally be deducted as a business expense. This is because the payment is made with reasonable expectation of a financial return, such as increased business visibility or customer goodwill. On the other hand, if payment is made without a direct relation to the taxpayer’s business or without an expectation of financial return, it would be considered a charitable contribution by the individual, and not the business, and deducted on Schedule A (not Schedule C).

Certain de minimis benefits provided by a charity to a donor do not affect the donor's charitable contribution deductions. Under these rules, charitable contributions will be fully deductible in 2025 if:

In addition, charitable contributions will be fully deductible if the benefit received by the donor isn't more than the lesser of $136 ($132 for 2024) or 2% of the amount of the contribution.