If i take in 50k of income and donate 40k to a 501(c)(3) non-profit, how much money will have to pay taxes on?

I am a sole proprietorship.


  • As a sole proprietor of (presumably) an unincorporated business, you report your income of 50k on Schedule C, and pay both employer's share and employee's share of Social Security and Medicare Tax on it (though you get an adjustment on Form 1040 for the employer's share which reduces your AGI). As littleadv notes, the maximum charitable deduction is essentially 50% of the AGI. So if you have no other income and your AGI is 50K-FICA/Medicare adjustment, you would be able to deduct at most 50% of that, and have to pay income tax on the rest, plus the FICA/Medicare tax from Schedule C. Mar 10, 2012 at 22:14

1 Answer 1


At least on 25K. Here's the actual IRS publication, it's fairly complex and the limits depend on the types of organization you're donating to, and the types of property you're donating. Some donations may be limited to the maximum of 20% of your AGI.

Bottom line - the maximum you can deduct in almost all circumstances would be 50% of the AGI (very few exceptions allow deducting up to 100% of your AGI).

Worth mentioning that whatever you cannot deduct this year - you can roll over to the next year.

  • Sorry, I can't comment yet. Re: "Worth mentioning that whatever you cannot deduct this year - you can roll over to the next year." If I donate 50K and claim tax deductions on 25K of it in the first year, does that mean I can claim 25K more of it next year? Or did I read that last part wrong.
    – RonSper
    Dec 3, 2012 at 7:45
  • @RobSper what you cannot deduct in current year is rolled over to the next. The deduction limit depends on your income at that year.
    – littleadv
    Dec 3, 2012 at 18:06

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