Charitable Business....how Do You Keep Track?
Business By SGPB Updated 26 Mar 2015 , 6:42pm by costumeczar
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:)
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
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!
Read more at http://www.cakecentral.com/forum/t/783230/desparate-help-needed-with-info-for-tax-return#E6vxz2RmFuxGsTMx.99
Read more at http://www.cakecentral.com/forum/t/783230/desparate-help-needed-with-info-for-tax-return#E6vxz2RmFuxGsTMx.99
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.
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!
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.
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