As a consultant I am paid with no tax or social security, health deductions etc. Due to a shortage of funds, I have agreed to work an extra 5 hours a week for free - or donated time. I am curious when I do my taxes if I can deduct this from my total earnings?
2006-10-24 07:54:21 · 5 answers · asked by modtape 1 in Business & Finance ➔ Taxes ➔ United States
Donated time is never tax deductible, only expenses.
From IRS web site:
Contributions you cannot deduct at all include contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance. You cannot deduct contributions that you give to qualified organizations if, as a result, you receive or expect to receive a financial or economic benefit equal to the contribution.
Although you cannot deduct the value of your time or services, you can deduct the expenses you incur while donating your services to a qualified organization. If the expenses are for travel, which may include transportation and meals and lodging while away from home, they may be deducted only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Actual costs of gas and oil can be deducted, or you can choose to take 14 cents per mile for using your own car.
2006-10-24 07:57:10 · answer #1 · answered by Barkley Hound 7 · 0⤊ 0⤋
IRS Publication 526 specifically states that the value of time or services cannot be deducted.
Value of Time or Services
You cannot deduct the value of your time or services, including:
*
Blood donations to the Red Cross or to blood banks, and
*
The value of income lost while you work as an unpaid volunteer for a qualified organization.
2006-10-24 13:06:43 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
No, volunteer time is not tax deductible. Any out-of-pocket expenses associated with the volunteering can be deducted, although the mileage rate is lower than for business travel.
2006-10-24 08:18:06 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
Yes you can. Volunteering time can count just like donating clothes and the like. Check with your accountant about the best way to document or just check our the IRS website.
2006-10-24 07:56:55 · answer #4 · answered by Pysees 2 · 0⤊ 3⤋
Sorry, according to the IRS, your time has no value.
2006-10-24 08:12:01 · answer #5 · answered by Wayne Z 7 · 0⤊ 0⤋