Charitable Deduction when self employed?

Jun 16, 2011 1 Replies
A

I am a self-employed web developer. Can I take a charitable deduction for either of the following?:


  1. I perform regular web maintenance/development for a 501-c(3) charity at no cost. There are no tangible costs involved in the work other than my own time.

Or;


  1. I provide web hosting for the same 501-c(3) for half the price I charge my non-charity customers. Can I take a deduction for the difference as a donation? (I purchase the hosting in volume as a reseller so there is no really substantial "cost" to me for the hosting that I provide them).

Thanks,



========================================= MODERATOR'S COMMENT: No and No. For income tax purposes, there is simply no deduction allowed for the value of your time and services.


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R

Your time is not deductible. The IRS publication says this.

Not deductible. If you charged them full price you would report say $200 in income, then donate $100, leaving you with $100 of income. So if they just pay you $100 and you take no deduction, you're at the same place. (Not quite though because in the first scenario the full $200 is subject to self-employment tax while the deduction happens on Schedule A.)

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