Any CPAs out there wanna do me a solid?

February 1, 2010 4:59 AM

This year I did a ton of IT work for a non-profit for no money. Can I claim this on my taxes?

This past year, I had a friend who worked for a non-profit that had just moved to a new location and needed help setting up their computer network. I ended up becoming their temporary IT guy for a couple of months, showing them how to get everything set up, helping them rehab some older machines, and explaining why they should throw out their windows 2k machines.

After I'd put in maybe 10-15 hrs of work, one of people who worked there said "Hey, if we were actually one of your paying clients, how much would this cost?" and I told her between $125-150 an hour. She then said "If you want to declare this on your taxes, I can write you a letter stating that you did all this work and it should be deductible."

I've never heard of anyone doing anything like that, but I have to admit, it sounds appealing to be able to deduct $2k from my taxes.
Is it OK for me to do this? If so, where would I do this on my tax return? As much as I'd like the deduction, I would rather not be doing anything shady.

Thanks in advance, hivemind.

posted by orville sash to Work & Money (7 answers total)

I'm no expert, but I don't believe you can deduct the value of services performed for charity. But you may be able to deduct other expenses related to your charitable work.


IRS on Deducting Charitable Contributions
posted by roomwithaview at 5:02 AM on February 1, 2010

Best answer: From the IRS link:

Q: I do volunteer work 6 hours a week in the office of a qualified organization. The receptionist is paid $10 an hour to do the same work I do. Can I deduct $60 a week for my time?

A: No, you cannot deduct the value of your time or services.


By the way, good on you for volunteering your expertise!
posted by roomwithaview at 5:05 AM on February 1, 2010

Response by poster: Thank you for the speedy resolution on this one. I didn't think that was possible, and I certainly didn't do the work for a deduction, but since the idea was put in my head, I was curious.

Thanks again.
posted by orville sash at 5:21 AM on February 1, 2010

The way around this is to invoice them for your time, get paid for it, and then give the money back.

You don't even have to cash the check.

And yes, it's possible to deduct the difference between a billed amount and the normal cash value of something...ergo, if you normally charge $25/hour but only charge $10/hour, the $15/hour is potentially deductible. This is one of the ways that x-big-name-housing-charity recruits high-end builders to work on their sites. I am not a tax professional, this is not tax advice.
posted by TomMelee at 5:49 AM on February 1, 2010

The way around this is to invoice them for your time, get paid for it, and then give the money back.

That doesn't work. Even if the steps are respected, at best, the deduction for donating the money would only offset the inclusion from earning the money in the first place. The overall tax picture would be no better than not getting paid and not having a deduction.

And yes, it's possible to deduct the difference between a billed amount and the normal cash value of something...ergo, if you normally charge $25/hour but only charge $10/hour, the $15/hour is potentially deductible.

Again, as noted above, the IRS appears to take a different view.
posted by planet at 6:17 AM on February 1, 2010

I am not a professional giver of tax advice, specifically not your professional giver of tax advice.

In Publication 526 linked above, you can deduct out-of-pocket expenses for vehicle usage (a mileage estimate at $0.14/mile) while performing charitable work. I usually figure this as "it's X miles from my house and I went Y times this year", and there are records available to back it up if needed.

You can also deduct something for unreimbursed expenses. For example, if you bought some cables or other miscellaneous items during your charitable IT work and the charity didn't pay you back. See Out-of-Pocket Expenses.

Not much, but if you're eligible for it...
posted by jmcmurry at 7:01 AM on February 1, 2010

Response by poster: Thanks, jmcmurry. I actually rode my bike, and only used components that were already onsite, so my out of pocket expeses were exactly nil, but thanks for the heads up.
posted by orville sash at 8:01 AM on February 1, 2010