Pro Bono
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- whatthefunk0
This is how the Dept. of the Treasury (in US) answers that question -
http://www.treas.gov/education/f…Under current law, volunteers are prohibited from taking a charitable contribution deduction for the value of the services they provided to charities. However, the tax code does support volunteer work for charitable organizations by allowing volunteers to take a charitable contribution deduction for expenses they incur in connection with their volunteer services, but the expenses must be ones the charity would otherwise have to incur, not personal expenses of the volunteer. For example, volunteers may deduct the cost of materials they donate for use in repairs to a church, supplies they use in leading activities at a day care center, or uniforms they wear when serving as nurses' aides. However, volunteers may not deduct personal expenses such as meals eaten during a break in a local service project, transportation to and from a school where they donate their time, or child care expenses.
- SumWurk0
Pro Bono work can be hazardous to your health.
- lukus_W0
Gramme, I see what you mean, but in essence through charity donation you are getting a deduction on the tax you would have paid on the money you earned, should you have decided to keep it.
It seems quite fair that you're not expected to pay tax if you pass the money on through good will.
- But if no money is earned it would be difficult to claim the benefit.lukus_W
- gramme0
Thinking about this a bit more... I guess it doesn't really hold up, huh.
Pants.
- gramme0
lukus, maybe I'm thinking of this in too simplistic terms, but when I give money to my church, I get a tax deduction for it. So the idea is that I donated X work which is worth X dollars. It's time that could ostensibly be spent doing paid work, i.e. it could be seen as a donation.
What nosaj says makes sense though, about getting paid and then donating it. I think. I'm horrible at algebra. Also, it's Friday and I'm still working. Mind = fried.
- lukus_W0
If you weren't paid - how on earth can you pay tax in the first place?
- nosaj0
What could you gain by getting paid then donating it back? Sure that amount would be tax-deductable but your taxable income was also that much more. It would be a wash, no different then not charging to begin with.
- ethanfink0
I asked my accountant in NY, he said no-can-do...
The getting paid, then donating idea though sounds legit :)
- gramme0
quick bump for bzsaw...
Did they pay you the full amount before you refunded it?
- gramme0
bzsaw, how exactly did you go about that? Did you invoice them and then as a line item discount your entire fee?
BTW there are two specific clients in question. Both are various kinds of registered nonprofit. One's pro bono, the other is drastically discounted. The latter has already given me an official letter recognizing the amount of discount.
I do understand the difference in working for those kinds of business vs. just giving it away to a for-profit.
- lukus_W0
I'm very much anti Bono.
- bzsaw0
Consult a CPA in your state for the details. In Oregon you cannot write off work unless there was a transaction. I actually had to charge the non-profit and then donate the money back to show the donation.
I know, it doesn't make any sense.
- scarabin0
AIGA on only charging tax for goods, not services:
- nosaj0
Say you made $50,000 in a year and contributed another $50,000 of your time to a charity and you were able to claim pro bono work done for nonprofits as charitable donations you would not pay any income tax at all.
If you made $50,000 in a year and contributed $50,000 cash to a charity you would have no income to tax - thus a $50,000 tax deduction.
- johndiggity0
pro-bono to a 503c organization = tax deductable
pro-bono to a for profit (non 503c) = free work
- gramme0
@ duck... yeah I've gotten one letter from a recently completed nonprofit job. Just wasn't sure if I can actually claim a charitable donation deduction.
@ nosaj, I'd be looking for a deduction for charitable donation, not for unbillable time per se.
- nosaj0
You aren't being taxed for the time you aren't billing for - what are you looking to have tax-deductible?
- duckofrubber0
You need to get a letter from the non-profit that acknowledges your donation with dollar amount in order to claim it as a proper deduction.