A common question that business owners as me is, “I did some work for a charity and instead of billing them for my time, I figured I’d just write it off as a charitable donation. Is there anything I need to get from them in order to claim the deduction?”
The short answer to that question is, “No.”
However, the longer and more appropriate answer is that your time is not a valid tax deduction. If you work on a project for a charity, whether it be accounting work, website design, plumbing work, etc. the only things you get to deduct are your direct costs.
If you design a website for a charity, you can deduct items like domain registration fees, web hosting fees, the cost of any templates/pictures/plugins/add-ons that you purchased for the site, your mileage or automobile expenses to-and-from the charity’s location if you met with them, and any other incidental costs such as postage, office supplies, etc.
If you do plumbing work at a charity’s office, you can deduct the cost of labor if you paid one of your employees to do the work (along with any related payroll taxes, insurance, etc.), mileage or automobile expenses to-and-from the charity’s location, the cost of parts & materials, etc.
So, before you start doing work for charitable organizations, make a decision whether you will be donating your time for free (with no tax write-off for your time) or if you will be billing them for your time.
