If you make donations to charity, it makes sense to take advantage of all of the tax deductions you can, so you can keep more of your hard-earned money.
Every jurisdiction has different rules around what you are allowed to deduct, but in general, if you are being charitable the government will be charitable right back to you, saving you tax dollars.
Donations can be made in the form of cash, property or other assets. However you choose to give, it’s essential to keep all documentation related to your donations, just in case the government decides to check up on things.
You can make a donation as your business, or from your own personal finances. In both cases, you can track the donations in Wave. (See below for instructions on how to add a financial category to your settings.)
With all of your charitable donations showing in Wave, you can now invite your accountant to be a Guest Collaborator; he or she can see what you’ve donated and make the maximum claim allowable on your tax return. The process is so simple you should never miss a tax deduction again.
How to add a financial category for charitable donations
Add a financial category for charitable donations made by your small business:
- From your business dashboard, go to Business Settings > Accounts > Add Accounts.
- Click the Expenses tab and search for Charitable Contributions.
Add a financial category for charitable donations made by you personally:
- From your Personal dashboard, go to Personal Settings > Financial Categories > Add Financial Category.
- Click the Expenses tab and search for Charity.
How to track your charitable contributions
If your contribution was made from a bank or credit card account that is connected to Wave, you can drag the imported transaction into the appropriate category.
If you made the donation with cash, go to the Expenses screen; for a business donation, use the Quick Entry function; for Personal, use Add Expense.
If you’re donating a non-cash asset, you can still track it in Wave. We’ll update this post soon with a follow-up. In the meantime, feel free to contact our Support team: email@example.com.
Wave Accounting provides this information as a guide to get you started. When it comes to actually reporting financial details to the government, you should check with your accountant or reference the rules in your jurisdiction to see how they apply to your unique situation.
The information and tips we’re sharing in this article are meant to be a starting point for your year-end tax prep, so you can be informed and feel confident when working with your accountant. Be sure to check with a tax expert in your country or region for any specific advice you need, as each business (and tax district) is different. As our lawyers would say: “This article is for informational purposes only. It should not be considered legal or financial advice.”