Tax-deduction question...I worked for a non-profit organization...?

Question

...and the board of trustees approved a salary for me.

However, the company never became financially stable enough to justify me taking the salary.

Is any of my work/services/expenses deductible because of this? I never received a salary from the organization, but was approved for one.

Any tax deduction tips?

I'd like to recoup my losses where I can....thanks in advance!

Answer 1

You have deductible out of pocket expenses only if the organization was an IRS approved charity. Was this an organization for which donations were tax-deductible? If so, then your out of pocket expenses can be included in your charitable deductions and included on Schedule A.

You cannot deduct anything if this is not an IRS approved charity.

You cannot deduct anything for your time or professional services you provided, even if this is an IRS recognized charity.

Answer 2

Any direct, out of pocket expenses paid on behalf of the organization is deductible as a charitable contribution. You should be especially careful to make sure that you have documentation of payment (non-cash). It would be best if the organization gave you a receipt for the amount spent.

You may not deduct your the salary you did not receive. The best way to explain why is - you were never taxed on the income, so you may not take the deduction.

Answer 3

This is non-profit organization, so you get zero tax benefits of any donation to it.

But, there is another aspect, why won't IRS treat this as:
You received wages and then donated the wages to the organization.

Depending upon if these were W2 or 1099 wages, you as well organization or you alone are responsible for paying taxes. Then you gifted the money to the organization. If it is over $12,000, you are to file gift tax return.

In short, claim your salary. Why do you want to give all your money (your money) to the organization? Why you wish to suffer loss and get into problems? Let the board handle the loss; they surely have better resources than you to handle it.

Answer 4

The only thing that would be deductible is out of pocket expenses, since you ended up being a volunteer.

You never got the income, so there's nothing to deduct.