I have my own business and also like playing tennis. There is an upcoming tournament for which I would like to donate some money for as a sponsor.
If I donate the money from my business, is it tax-deductible? Since the expense is not related to my business, I thought it may not be deductible..
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Get your mind straight. You have a sponsorship expense, which most likely rises to the level of advertising for most of what you pay. Some of what you get from your sponsorship might be considered for "personal use" and therefore non-deductible. More facts are necessary to determine how much you get to deduct as a business expense.
It's not a "donation" it's a purchase of a sponsorship spot, which generally is inclusive of advertising for the business. Your business name and logo, etc are listed some place - right? So some part of what you spend is advertising if you get advertising from them in some form.
If all you get is some tickets and a tee shirt, then maybe not so much of that can be claimed as advertising for the business. But if you get a banner hung up on the fence,
Advertising is always deductible.
Now, there have been times when this was taken too far, as when the business "sponsored" the owner's drag racing activities (sponsorship deducted as advertising), and that deduction was challenged by the IRS, and the taxpayer won (I believe) in court as he proved that the advertising was directed at his clients and potential clients.
Donchaknow that Allstate deducted their sponsorship of the BCS games.
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