K PattersonPremium,MVM
join:2006-03-12
Columbus, OH
kudos:1 | No, no tax write off If a business refunds x dollars to its customer, the effect on their taxes is exactly the same as if they gave the money to charity. |
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 jester121Premium
join:2003-08-09
Lake Zurich, IL
 ·voip.ms
| You're right, but no one here understands how businesses operate anyhow.
(To say nothing of the fact that businesses pay taxes on their profits, which are generally non-existent for bankrupt companies.)  |
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| You are correct. There is no "tax write-off" for donating to charity in this case. Just another case of morons feeding off of other morons ignorance.
Whether the business gives the money to charity or credits the customer, it makes no difference for tax purposes. This is accounting 101. |
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cacoPremium
join:2005-03-10
Whittier, AK | Are you saying that this company is not going to take a deduction on their tax return for giving to the United Way?
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»www.seabee.navy.mil |
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 SteveI know your IP addressConsultant
join:2001-03-10
Yorba Linda, CA
kudos:5 | said by caco:Are you saying that this company is not going to take a deduction on their tax return for giving to the United Way? Yes, but it's a wash: it has the same effect on their bottom line - a reduction of income - as if they had sent that money to their customers as a credit.
They will enjoy far lower administrative costs (one check for $10k vs lots of little credits through their billing system), but I think that the main beneficiary here is the good PR vibe they get in many quarters.
Steve
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Stephen J. Friedl | Unix Wizard | Microsoft Security MVP | Orange County, California USA | my web site |
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cacoPremium
join:2005-03-10
Whittier, AK | Good PR? They are screwing the customer of a credit on their account for an outage. Not sure how that is good PR. Good PR would have been giving the customer the option to either a credit on their account or a donation to a charity on their behalf. |
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| reply to K Patterson
I would actually disagree the effect is exactly the same - since contributions are limited for a C Corporation to 10% of taxable income (subject to limited carryforward) a reduction of income is ALWAYS preferable, from a tax perspective.
I really don't understand the article summary mentioning the tax write-off. As you said, a better tax situation is available if they refund the money. |
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SteveI know your IP addressConsultant
join:2001-03-10
Yorba Linda, CA
kudos:5 | reply to caco
*In some quarters* - they're making a donation to charity, and those who don't really care to dig into the details might think favorably of them.
DSL Reports readers are not even remotely typical users. |
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