Have you donated your time and services to Charity?
I like hearing from people that enjoy giving to charity. Whether it is monetary or whether it is volunteering, giving to others not only brings a smile to the recipient, but it also warms the heart of those giving. In a previous blog, we have talked about getting the most out of your contributions, but today we want to deal with the donation of time and services. The question about the deductibility of donating ones time and services is a popular question. Just the other day I was helping one of my business clients set up a non-profit organization and this topic came up. So can you deduct your time and services?
The answer is yes and no. Don’t you just love that? The actual services and time is not deductible because the income on those services and time has never been picked up as income. This goes back to that most taxpayers are cash basis taxpayers. This means that they only pick up the income when it is received. When you donate your time and services you can’t deduct the “going rate” for your services as you have not picked that up as income. So what part can you deduct of your time and services donated to a charitable organization?
- Any expenses occurred while performing those services. For example, a dentist donates a teeth cleaning to a local charity. The dentist has to pay the employees to do the teeth cleaning on that service. So the employees pay will be deducted. There will be supplies and materials used in the cleaning service so those will be expensed as well.
- Mileage you drive for a charitable organization. (current mileage rate for charity is 14 cents/mile)
It is always great to hear stories of those giving back to their community. If you have any questions feel free to Contact us.