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I am a photographer who does portrait fundraisers occasionally during the year. I donate 100% of the sitting fees for such portrait events straight to charity, and give the customer a $25 print credit for attending the event.
Question: Can I just record the sitting fees as regular income and then record the donated fees as "advertising expense"? Since I do these events to get exposure?
Hello and thanks for your tax question.
Are you operating your business as a sole proprietor or as an S-corporation or C-Corp?
In general, if you are collecting ANY money, then the full amount is reported as revenue.
The amount you donate to charity is booked as charity or donation. How this is treated for tax purposes depends on your entity type.
You would not book the donations as "advertising expense" though, to be proper. It's a charitable contribution.
These contributions are subject to certain limitations, often no more than 50% of your gross income.