I took an assignment at a deep discount of my normal rate for a 501c3 nonprofit organization that is hugely important to me. Honestly, if I could afford to do it completely volunteer for them, I would!
Would I be able to take the discounted rate portion as a 'donation' tax deduction? For example, bill it at my normal rate and then apply a x% discount as a donation?
According to the IRS, you cannot take a deduction for time you have spent doing volunteer work. I would think that this falls under the same rule, of course this is my opinion and you should check with your tax advisor.
You actually agreed to provide your services at a reduced rate so this would be your contract with them. Think of the benefits that will be gained from the great job you will do. I have gotten many referrals from persons in organizations that I volunteer for. Most feel that while they cannot "pay" you for what you are giving to them the next best thing would be to sing your praises.
Thanks for answering that question. I was wondering the same thing myself.
I do volunteer work for an organization that is dear to my heart, and was wondering if I could use that. I do not invoice them at all, but I do keep track of my hours as I wasn't sure if I could use them or not for tax purposes. This is very helpful!
I just wanted to add. I find that to be the most rewarding work that I do, and I have learned so much working with them as they are more willing to throw things at me that I don't know how to do. I have learned tons!!! It's a great experience and I enjoy doing it.
Actually - you keeping track of hours won't be able to benefit you, but it can benefit them! When the NPO includes volunteer hours in their budgets they are potentially able to obtain more money for operating costs because, even though this is not a monetary expense it is...I believe...an in-kind expense. I know the concept but I'm not an accountant so I don't know exactly where they have that as a line item in their budgets. When they are seeking money they have to show what the money is for.
Discounts and Nonprofits
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