by Joe Wallace
Are you ready for tax time? One very important set of numbers you should be crunching–or planning to crunch next year–is the work you have donated for charity. Have you done any freelance work for your favorite causes? If not, consider doing some this year in anticipation of next year’s tax season. In addition to supporting a worthy organization that could use your skills, you’ll be able (with the advice of your favorite tax prep expert) take the allowable deductions in the appropriate manner.
Update: I’ve just gotten back from my new CPA (my first ever!) who tells me you need to be able to show a financial investment–not just a time investment–in your charity work in order to take a deduction for such involvement.
For example, as a freelance editor I could donate my time, which is done for the satisfaction of a cause well-supported–the IRS won’t cut you a break for that. But if I SPEND money to support my cause, it’s closer to being deductible. What’s the difference between a simple donation and, say, offering to pay part of the costs associated with a charitable event? Your tax preparer knows the answers–be sure to ask!
Save yourself some tax pain and give something back at the same time–you’ll be glad you did. And yes, the reason why this is top-of-mind for me is that today was the day I got to deal with the tax man…