Can an LLC Write Off Charitable Donations? Limits and 2026 Changes

Yes, an LLC can write off charitable donations, but for almost every LLC the deduction is claimed by the owners on their personal tax returns rather than by the business itself. That is because the IRS treats most LLCs as pass-through entities, so charitable gifts made through the business flow onto each owner’s Form 1040. Starting in 2026, the One Big Beautiful Bill Act changed the math with a new deduction for non-itemizers, a new floor for itemizers, and a permanent higher ceiling for cash gifts.

Who Actually Claims the Deduction

The IRS has no separate tax bucket for LLCs. It classifies each one based on how many owners it has and whether the owners elected different treatment. That classification decides where the charitable deduction appears.

A single-member LLC is a “disregarded entity” by default. The business and its sole owner are the same taxpayer, and the LLC doesn’t file its own income tax return.¹ A donation the LLC makes goes on the owner’s Schedule A as an itemized deduction.²

A multi-member LLC is taxed as a partnership by default. It files Form 1065 as an informational return but pays no income tax. Each member gets a Schedule K-1 showing their share of the LLC’s charitable contributions in Box 13, broken out by donation type and AGI limitation category.³ Members carry those figures to their own Schedule A.

An LLC that elected S-corporation status works the same way. The LLC files Form 1120-S, and each shareholder’s share of contributions appears in Box 12 of Schedule K-1 with codes for each AGI limit.⁴ The shareholder reports the amount on Schedule A.

In all three of these structures, the LLC itself never takes a charitable deduction. The gift is an individual deduction, subject to individual AGI limits and the individual itemization rules.

The Exception: An LLC Taxed as a C-Corporation

An LLC that elected C-corporation status plays by different rules. The LLC claims the deduction on its own Form 1120, and it doesn’t flow through to owners. Starting in 2026, corporate charitable deductions are allowed only to the extent contributions exceed 1% of taxable income, and the deduction cannot exceed 10% of taxable income.⁵ The 1% floor is new. A C-corp LLC with $500,000 of taxable income that donates $8,000 gets to deduct $3,000: the amount above 1% of income. Contributions above the 10% ceiling or below the 1% floor can be carried forward for up to five years.

What Changed in 2026

Three changes from the One Big Beautiful Bill Act reshape the deduction for LLC owners.

A new above-the-line deduction is available to people who don’t itemize. If you take the standard deduction ($16,100 single, $32,200 married filing jointly in 2026), you can deduct up to $1,000 in qualifying cash contributions, or $2,000 if married filing jointly.⁶ It applies only to cash gifts to qualifying operating charities. Donor-advised funds don’t qualify.

Itemizers now face a 0.5% AGI floor. You can only deduct the portion of your charitable contributions above 0.5% of your adjusted gross income. Someone with $200,000 in AGI loses the tax benefit on the first $1,000 of donations. This floor didn’t exist before 2026 and is where most people’s math changes.

The 60% AGI ceiling for cash contributions to public charities is now permanent. It had been a temporary provision scheduled to revert to 50%.²

Which Organizations Qualify

The recipient must hold tax-exempt status under Section 501(c)(3), which covers religious, educational, scientific, literary, and charitable organizations, among others.⁷ Churches, universities, and nonprofit hospitals are typical examples.

Two tax-exempt categories that trip people up don’t qualify: 501(c)(4) social welfare organizations and 501(c)(6) business leagues, which include chambers of commerce and trade associations. Contributions to neither type are deductible as charitable gifts.⁸⁹ Dues to a 501(c)(6) may be deductible as an ordinary business expense, which is a different line item with different rules.

Before donating, verify the organization’s status through the IRS Tax Exempt Organization Search, which draws from the Publication 78 list of eligible organizations.¹⁰ Groups that have lost their exemption still show up in some third-party databases.

How Much You Can Deduct

Federal law caps deductions based on the individual owner’s adjusted gross income, not the LLC’s revenue.

Cash to public charities: 60% of AGI. This is the common case for LLC owners writing checks to established nonprofits.
Appreciated property to public charities: 30% of AGI. If your LLC donates stock, real estate, or other capital assets held longer than a year, this lower ceiling applies. The offsetting benefit is that you deduct fair market value without paying capital gains tax on the appreciation.
Capital gain property to private foundations: 20% of AGI. Gifts of appreciated assets to most private non-operating foundations face the tightest limit.
Cash to private foundations and certain other organizations: 30% of AGI.

Donations above these ceilings aren’t lost. You can carry excess contributions forward for up to five additional tax years.²

The new 0.5% AGI floor applies before these percentage ceilings, so you lose the bottom slice of your donations regardless of the type of property or the type of recipient.

What You Cannot Deduct

Several common forms of giving produce no tax benefit.

The value of donated services and professional time is not deductible. If your consulting LLC provides ten hours of free strategy work to a nonprofit, no deduction is allowed for the time. Unreimbursed out-of-pocket expenses tied to volunteer work are deductible when they’re directly connected to the charitable service.²

When you get something back for your contribution, only the amount exceeding the value received is deductible. A $500 charity gala ticket that includes a $150 dinner produces a $350 deduction. For payments above $75, the charity must provide a written disclosure estimating what it gave you in return.¹¹

Used clothing and household items are deductible only if they’re in good used condition or better. An exception exists for a single item valued above $500, but only with a qualified appraisal and Form 8283, Section B.² Fair market value is what a thrift store or consignment shop would charge, not the original price.

When It’s a Business Expense Instead

Not every payment to a nonprofit has to be treated as a charitable contribution. If your LLC sponsors a local 5K and gets its logo on shirts and banners, that payment may qualify as advertising under Section 162, which covers ordinary and necessary business expenses.¹² The distinction matters. Business expenses reduce self-employment income, lowering both income tax and self-employment tax, and they don’t require you to itemize.

The line comes down to what you got in return. A meaningful advertising or promotional benefit points to a business expense. A polite thank-you and nothing more points to a charitable contribution under Section 170. You can’t claim the same payment as both, and federal law explicitly bars deducting a contribution as a business expense if it would otherwise qualify as a charitable contribution.¹²

Documentation and Appraisals

Requirements scale with the size of the gift, and poor records are one of the fastest ways to lose a deduction on audit.

For any cash donation, you need a bank record (statement, canceled check, credit card receipt) or a written communication from the charity showing its name, the date, and the amount.¹³ Personal notes and check registers alone don’t cut it.

For any single contribution of $250 or more, you also need a written acknowledgment from the charity stating the amount of cash or a description of the property and whether you received any goods or services in return. If you did, the charity must give a good-faith estimate of the value.¹⁴ The letter must be in your hands by the time you file the return for the year of the gift.

For noncash donations totaling more than $500 in a year, file Form 8283 with your return. Section A covers property valued between $500 and $5,000 and requires a description, date acquired, cost basis, and fair market value.¹⁵

Noncash donations valued above $5,000 trigger Section B of Form 8283 and require a qualified appraisal by a qualified appraiser.¹⁶

Valuation mistakes carry real penalties. The standard accuracy-related penalty is 20% of the resulting tax underpayment. A gross valuation misstatement raises it to 40%, and an overstatement of certain qualified charitable contributions can trigger 50%.¹⁷

Where to Report It on Your Return

Reporting depends on your LLC’s classification and whether you itemize.

Single-member LLC owner who itemizes: charitable contributions go on Schedule A (Form 1040), with cash on line 11 and noncash on line 12.² Taking the standard deduction instead? You can still claim the new above-the-line deduction of up to $1,000 ($2,000 married filing jointly) for qualifying cash gifts.

Multi-member LLC taxed as a partnership: each member’s share of contributions comes through on Schedule K-1 (Form 1065), Box 13, with codes A through G identifying the type and applicable AGI limit.³ Transfer those amounts to your own Schedule A. The partnership itself never claims the deduction.

LLC taxed as an S-corporation: shareholders receive their share through Box 12 of Schedule K-1 (Form 1120-S) with the same lettered codes, then report the amounts on Schedule A.⁴

Whether You’ll Actually Benefit

Here’s the practical piece that decides whether any of this helps. Claiming the full deduction requires itemizing, and itemizing only pays off when your total itemized deductions exceed the standard deduction. With the 2026 standard deduction at $16,100 single and $32,200 married filing jointly, many LLC owners with modest giving won’t cross the threshold.⁶

If you fall below that threshold, the new non-itemizer deduction still gives you a smaller but real benefit: up to $1,000 ($2,000 married filing jointly) for cash donations to qualifying operating charities. For a married couple in the 22% bracket donating $2,000, that’s about $440 back. Donor-advised funds don’t qualify for this deduction.

Some LLC owners use a bunching strategy to clear the itemization bar. Instead of donating $5,000 every year, they donate $15,000 every third year, pushing itemized deductions above the standard deduction in the bunching year and taking the standard deduction in the other two. With the 0.5% AGI floor cutting off the bottom of the deduction and the standard deduction sitting high, bunching has become more valuable for mid-range donors.

1
Internal Revenue Service. Single Member Limited Liability Companies
2
Internal Revenue Service. Publication 526 (2025), Charitable Contributions
3
Internal Revenue Service. Partners Instructions for Schedule K-1 (Form 1065) (2025)
4
IRS. 2025 Shareholders Instructions for Schedule K-1 (Form 1120-S)
5
Office of the Law Revision Counsel. 26 U.S. Code 170 – Charitable, etc., Contributions and Gifts
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Internal Revenue Service. Exempt Purposes – Internal Revenue Code Section 501(c)(3)
8
Internal Revenue Service. Donations to Section 501(c)(4) Organizations
9
Internal Revenue Service. Tax Treatment of Donations: 501(c)(6) Organizations
10
Internal Revenue Service. Tax Exempt Organization Search
11
Office of the Law Revision Counsel. 26 U.S. Code 6115 – Disclosure Related to Quid Pro Quo Contributions
12
Office of the Law Revision Counsel. 26 U.S. Code 162 – Trade or Business Expenses
13
Internal Revenue Service. Substantiating Charitable Contributions
14
Internal Revenue Service. Charitable Contributions: Written Acknowledgments
15
Internal Revenue Service. About Form 8283, Noncash Charitable Contributions
16
Internal Revenue Service. Instructions for Form 8283
17
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments