Charitable Do You Keep Track?

Business By SGPB Updated 26 Mar 2015 , 6:42pm by costumeczar

SGPB Posted 23 Mar 2015 , 11:10pm
post #1 of 6

As my online bakery continues to grow I am happy to give many many cakes as donations. I have no idea how to keep track of this with spending and for tax purposes! I use cakeboss software so any tips on how to use that for charitable giving would be awesome. Thanks y'all! 

P.S.. I have been reading everything on this site for forever but have never actually started a conversation lol:) I love all of you and enjoy the help I have gotten just from searching here:)

5 replies
-K8memphis Posted 24 Mar 2015 , 12:00am
post #2 of 6

glad you started posting -- keep up the good work

i have cake boss i don't use it much because i retired soon after i got it -- but there was a discussion on here about that or about using it for tax purposes -- if i wanted to know the answer to that question i'd go straight to the cake boss peeps -- but somebody smart will probably know here too --

also glad to hear your bakery is growing -- very nice for you

BakerBlackCat Posted 24 Mar 2015 , 1:27am
post #3 of 6

As @MimiFix said in another thread, "donated baked goods are not acceptable as a write-off if they have been made with ingredients already expensed." 

I use Cake Boss also, and on the advice of my accountant, I use invoices to track where I take free stuff, and how much it's actually costing me, but since I expense my ingredients and other supplies, that's where that accounting ends.  I create the packages, and then zero out the invoice; print the invoice and file it away.  I can take the charitable donation or I can take the expense.  Check with your accountant though - they may say something totally different, in which case, you should do that!

Yay for growing bakeries!

donated baked goods are not acceptable as a write off if they have been made with ingredients already expensed
donated baked goods are not acceptable as a write off if they have been made with ingredients already expensed

johnson6ofus Posted 24 Mar 2015 , 2:55am
post #4 of 6

Like black cat said, you get no extra benefit from "charity". 

If you buy $30 worth of ingredients and make 10 cakes. You sell 6 for $20 each, you donate 2 to charity, and you throw out 2 because they went stale before you could sell them..... it is the same. 

In VERY simple terms, you basically tell the IRS you spent $30, and made $120 (6 times $20) , so you pay taxes on the $90 profit.

You certainly want to track it, so you know that 2 were thrown out so you make less next time, and 2 were not sold but given away... but that is to help you budget how many cakes to make. 

SGPB Posted 24 Mar 2015 , 4:00am
post #5 of 6

Thanks, everyone. I am not really looking to benefit from donating, that's not why I do it, but I do my own taxes and am now doing it just like BakerBlackCat mentioned, zero balance due and ingredients used. Just wanted to know how others were doing it because I was just mindlessly doing what was easier for me thinking "hey, that'll work for now":) Work smarter, not harder! 

costumeczar Posted 26 Mar 2015 , 6:42pm
post #6 of 6

Depending on what type of business structure you are, too, you can't write off donations on your taxes. I'm a pass-through LLC and I can't take deductions for donations.

Quote by @%username% on %date%