Comments on: How to Deduct the Value of Services Rendered to a Non-Profit Organization http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/ Tips, Tricks, and Articles on Photography Fri, 13 May 2011 11:14:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Rosemary Noriega http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-127 Rosemary Noriega Sun, 29 Jun 2008 17:13:31 +0000 http://www.pshizzy.com/?p=77#comment-127 WOW - interesting - thanks! WOW – interesting – thanks!

]]> By: Joseph Tames http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-116 Joseph Tames Thu, 26 Jun 2008 15:25:52 +0000 http://www.pshizzy.com/?p=77#comment-116 Lets keep our eye on the ball. The question was how to deduction the value of donated services. If you want to donate your time to a non-profit without thinking how to deduct this time against your taxes, then donate your time. If you want to deduct such time against your taxes, then this is the only way. And Chris, "Terrible Tip" is little strong for an apples and oranges comparison. Yes, the invoice is added to your income. However, the deduction does not reduce your business income; it reduces adjusted gross income in the form of an itemized deduction. Provided, of course, you are able to itemize in the first place. MFJ filers need to have medical, tax, interest, charity, and unreimbursed job expenses exceed over $10,000 just to use Schedule A. LLCs and S-Corps don't deduct the donation against business income either. The donation flows to Schedule K as a pass-through item to the members/shareholders in their distributive percentages. Only C-Corps can deduct donations against business income, and only up to 10% of net income. Remember, the primary benefit is to gain something from something you were never going to get...a tax deduction. The second benefit to you is to increase your income to the point of not being subject to the IRS hobby-loss rules. Basically, this means you have three years to show a profit on your business; otherwise all business-related deductions are limited to business income. Translation: No business loss deduction against your personal taxes. That includes your cost of thousands of dollars in equipment. It's a game people. Know the rules and apply them to your specific situation. That means knowing how all federal, state, county, and city business and tax laws apply to you. Lets keep our eye on the ball. The question was how to deduction the value of donated services.

If you want to donate your time to a non-profit without thinking how to deduct this time against your taxes, then donate your time.

If you want to deduct such time against your taxes, then this is the only way.

And Chris, “Terrible Tip” is little strong for an apples and oranges comparison. Yes, the invoice is added to your income. However, the deduction does not reduce your business income; it reduces adjusted gross income in the form of an itemized deduction. Provided, of course, you are able to itemize in the first place.

MFJ filers need to have medical, tax, interest, charity, and unreimbursed job expenses exceed over $10,000 just to use Schedule A.

LLCs and S-Corps don’t deduct the donation against business income either. The donation flows to Schedule K as a pass-through item to the members/shareholders in their distributive percentages.

Only C-Corps can deduct donations against business income, and only up to 10% of net income.

Remember, the primary benefit is to gain something from something you were never going to get…a tax deduction. The second benefit to you is to increase your income to the point of not being subject to the IRS hobby-loss rules. Basically, this means you have three years to show a profit on your business; otherwise all business-related deductions are limited to business income. Translation: No business loss deduction against your personal taxes. That includes your cost of thousands of dollars in equipment.

It’s a game people. Know the rules and apply them to your specific situation. That means knowing how all federal, state, county, and city business and tax laws apply to you.

]]> By: Paul http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-114 Paul Thu, 26 Jun 2008 03:20:42 +0000 http://www.pshizzy.com/?p=77#comment-114 Could the deduction actually be taken as a cost of doing business to offset the income? If not, then Chris's comment has some legitimate concerns. If so, then it is a great opportunity. I would assume that as long as this was not paid out as personal income that it should hold water but do not have the experience to substantiate the recommendation. Could the deduction actually be taken as a cost of doing business to offset the income? If not, then Chris’s comment has some legitimate concerns. If so, then it is a great opportunity. I would assume that as long as this was not paid out as personal income that it should hold water but do not have the experience to substantiate the recommendation.

]]> By: Chris Salemi http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-106 Chris Salemi Wed, 25 Jun 2008 09:46:16 +0000 http://www.pshizzy.com/?p=77#comment-106 Terrible Tip!!!! Yes, you did get a donation, but you got a taxable income, too. If JoeAccountant invoices for $1,000, he now has income of $1,000. Take a deduction of $1,000 and he has a net income of $0 - NOT a net deduction of $1,000 - He's in the same position as if he just donated the services. If this is the type of advice you hand out, don't sign me up as a client. Terrible Tip!!!!

Yes, you did get a donation, but you got a taxable income, too. If JoeAccountant invoices for $1,000, he now has income of $1,000. Take a deduction of $1,000 and he has a net income of $0 – NOT a net deduction of $1,000 – He’s in the same position as if he just donated the services.

If this is the type of advice you hand out, don’t sign me up as a client.

]]> By: Timothy Adam http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-80 Timothy Adam Wed, 11 Jun 2008 18:41:54 +0000 http://www.pshizzy.com/?p=77#comment-80 Brilliant Tip! Counter signing an invoiced check payment right back to the non-profit leaves a valuable paper trail. You got an Invoice, a Check and also an offical Bank statement. Banks always process Credits before Debits so the loop will work fluently. Brilliant Tip! Counter signing an invoiced check payment right back to the non-profit leaves a valuable paper trail. You got an Invoice, a Check and also an offical Bank statement. Banks always process Credits before Debits so the loop will work fluently.

]]> By: Mike Harmon http://www.pshizzy.com/2008/06/how-to-deduct-the-value-of-services-rendered-to-a-non-profit-organization/comment-page-1/#comment-79 Mike Harmon Wed, 11 Jun 2008 07:00:23 +0000 http://www.pshizzy.com/?p=77#comment-79 I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road! I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

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