Are charitable donations made by your business direct business tax deductions?

Most likely, no.  The exact answer depends on the type of tax return filed for the business.

Businesses that file as C Corps (Form 1120)

Businesses that file as C Corps are able to directly deduct donations made to charty.  However, charitable donation deductions are limited to a maximum of 10% of net income.  Since most small C Corps are run to report nearly $0 taxable income each year, they are unable to deduct charitable donations.  Disallowed charitable donation amounts are lost and cannot be carried forward or transferred to shareholders.

Businesses that file as S Corps (1120S), Partnerships (1065), and Sole Proprietors (Schedule C)

A little better news, but still not the answer most people expect.  For these businesses, charitable donations are transferred from the business and reported as itemized deductions for the owners.  The donation can be reported on the business financial statements, but the donation amount is removed from deductible expenses when the income tax return is prepared.

Example, LLC owned by two partners.  The operating agreement specifies Partner A receives 60% of all costs and Partner B received 40% of all costs.  The LLC donates $10,000 to a qualified charity.  The donation is made from the business checking account and in the name of the business.  Partner A will report a $6,000 charitable donation and Partner B will report a $4,000 charitable donation on schedule A of their personal tax returns.  If one of the Partners does not itemize, they will not receive a tax benefit from the donation.  Alternatively, if the partners have high income, the itemized deduction can be phased out and provide little to no tax benefit.

Charitable Donation or Marketing?

What is expected outcome of the transaction?  If a payment is expected to build brand recognition or attract new customers, the payment is a marketing expense even though the recipient might be a charitable organization.  Buying a listing in the church directory to attract new customers is an advertising expense, not a charitable donation.