Can I deduct the time I donated?

Come tax time many self-employed individuals who donate their business time and services wonder if that time is deductable as a charitable donation.  Unfortunately, no, a donation of your time is not a tax deduction.  Self-employed individuals such as lawyers and therapists often donation their services to charitable organizations and think that each hour they work for the organization should be deductable as a charitable contribution based on their normal hourly billing rate but this is not allowed under IRS regulations. 

For a charitable contribution to be deductable on your tax return it must be a contribution of money or goods to a qualified charitable organization.  If you donate goods to a qualified organization then you can generally deduct the fair market value of those goods at the time of donation.  Charitable donations are usually limited to 50% of your adjusted gross income and are reported on Schedule A of your personal tax return.

Contributions that do not qualify for tax purposes are contributions from which you benefit, contributions to specific individuals, contributions to non-qualified organizations, the value of your time or services, your personal expenses, appraisal fees, certain contributions to donor advised funds, and certain contributions of partial interests in property.

If you have questions on whether or not a specific contribution you have made or are thinking of making qualifies for tax purposes it is always a good idea to consult your tax advisor.


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