Businesses: Watch Out for New Limits on Charitable Write-Offs!

One of the changes made by the One Big Beautiful Bill Act is to the tax treatment of charitable donations made by corporations. For tax years after 2025, corporations may deduct charitable contributions only to the extent that the contributions (in aggregate) exceed 1% of that tax year’s taxable income. The deduction can’t exceed 10% of the corporation’s taxable income for the tax year. But corporations are allowed to carry forward any excess of 10% for five tax years on a first-in, first-out basis. Note that these rules don’t apply to qualified conservation contributions by corporate farmers or ranchers, or by Native Corporations. Contact us with any questions.