If you want to donate, never let a grocery store round up for you and take your tax write-off so they can pay even lower taxes subsidized by you, just donate $10 every month or so and take the tax writeoff yourself.
If you pay the donation you get the tax write-off, regardless of whether you donate through a grocery store, directly through the charity, or through your paycheck. It’s on your receipt and you can claim it. The store cannot legally claim the tax write-off that you made because it is not income for them, they are simply holding the money.
Now in this case where they are donating a portion of the sales, this is what’s called a commercial co-venture, and it’s a regulated activity that usually has a written arrangement to protect the non-profut. While the business does get the tax benefit since it counts as income, if you were already planning on buying a Gatorade, it doesn’t benefit you or the non-profit to buy it elsewhere just to “stick it” to the store.
so they can pay even lower taxes subsidized by you
That… isn’t how it works. It’s a very common misconception.
If you pay a store $5, they pay some amount of income tax on that. If you pay them $5 plus an extra $2 for a donation, they can deduct income tax on the $2, but they still owe the same amount of tax on the $5.
It’s the same for personal income tax. If you earn $1000 and make a $100 tax-deductible donation, you can only deduct tax on the donation. Essentially you’d be taxed as if you only earned $900. You still owe the exact same amount of tax on the $900 though.
They can’t deduct the $2 donation if you made the donation at POS. It doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
t doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
Ahh, I didn’t know this! Thanks for the info. It means the “companies just want you to donate at checkout so they get a tax writeoff” thing that people keep saying is even less true. That viewpoint is so prevalent and I’m not sure why - I guess there’s a lot of people that don’t understand how taxes work.
There is a big metal cage at the entrance of our store, where customers can “donate” stuff like dog food cans and blankets to a nearby animal shelter. You’re only allowed to put stuff in there that you JUST bought inside of the store (allegedly for “safety reasons” so that noone can put poisoned food in there or whatever) and the store then treats the contents of that cage as donations FROM the store even tho the items have been paid in full by customers already.
Shady AF but if you try to argue against it, people automatically assume that you’re a mean A-hole that wants shelter dogs to starve. No idea whether this is even legal TBH.
If you want to donate something, always donate cash or items DIRECTLY to a shelter.
Most people don’t have reason to itemize their deductions and will get more from the standard deduction. You probably won’t be able to deduct the donation either.
Remember, when a corporation says they’ll donate something when you buy something, like rounding up to the nearest dollar or donating $0.25 for every purchase, they are doing it because they were going to throw their money at some 501©(3) for tax reasons anyways and they figured they’d make it a big opportunity to publicly launder their reputation as an ad campaign
If you want to donate, never let a grocery store round up for you and take your tax write-off so they can pay even lower taxes subsidized by you, just donate $10 every month or so and take the tax writeoff yourself.
If you pay the donation you get the tax write-off, regardless of whether you donate through a grocery store, directly through the charity, or through your paycheck. It’s on your receipt and you can claim it. The store cannot legally claim the tax write-off that you made because it is not income for them, they are simply holding the money.
https://apnews.com/article/fact-checking-000329849244
Now in this case where they are donating a portion of the sales, this is what’s called a commercial co-venture, and it’s a regulated activity that usually has a written arrangement to protect the non-profut. While the business does get the tax benefit since it counts as income, if you were already planning on buying a Gatorade, it doesn’t benefit you or the non-profit to buy it elsewhere just to “stick it” to the store.
That… isn’t how it works. It’s a very common misconception.
If you pay a store $5, they pay some amount of income tax on that. If you pay them $5 plus an extra $2 for a donation, they can deduct income tax on the $2, but they still owe the same amount of tax on the $5.
It’s the same for personal income tax. If you earn $1000 and make a $100 tax-deductible donation, you can only deduct tax on the donation. Essentially you’d be taxed as if you only earned $900. You still owe the exact same amount of tax on the $900 though.
They can’t deduct the $2 donation if you made the donation at POS. It doesn’t count as income for them, and it shows up on your receipt, so they do not legally get to write off that $2.
https://apnews.com/article/fact-checking-000329849244
Ahh, I didn’t know this! Thanks for the info. It means the “companies just want you to donate at checkout so they get a tax writeoff” thing that people keep saying is even less true. That viewpoint is so prevalent and I’m not sure why - I guess there’s a lot of people that don’t understand how taxes work.
There is a big metal cage at the entrance of our store, where customers can “donate” stuff like dog food cans and blankets to a nearby animal shelter. You’re only allowed to put stuff in there that you JUST bought inside of the store (allegedly for “safety reasons” so that noone can put poisoned food in there or whatever) and the store then treats the contents of that cage as donations FROM the store even tho the items have been paid in full by customers already.
Shady AF but if you try to argue against it, people automatically assume that you’re a mean A-hole that wants shelter dogs to starve. No idea whether this is even legal TBH.
If you want to donate something, always donate cash or items DIRECTLY to a shelter.
Most people don’t have reason to itemize their deductions and will get more from the standard deduction. You probably won’t be able to deduct the donation either.
“So you don’t donate anything?”
“No, kid hungry! I should probably remove that 501c part, too…”