In summation: I'm unemployed and looking for design work to keep the architecture stew in my head stirred up and have a question regarding some work I am pursuing.
Question: Is there a way to work for a non-profit and be able to claim that work as a tax deduction as if I were providing a pro-bono professional service at a junior arch / intern arch / graphics specialist? I am not licensed and do not have my own company established (yet). Would I need to establish my own .llc or .pllc to claim it on my taxes?
My (perhaps ignorant logic) makes me think that there is some market value (...or not in this market) for my services. Even though I'm not taking a paycheck, I'm still providing a professional service like a lawyer/doctor would when taking on a pro-bono case/patient. This of course, assumes that you can say I worked X hours for Y client and would have gotten paid Z. Then Z comes out of my taxes...
I'm not an accountant and obviously don't know much about this topic yet ...so maybe it can't be done, that is the question.
if your assumption is that you can work for a non-profit, be paid, and somehow write off the income as a tax deduction, then no.
if your assumption is that you're making a little bit of money on the side and want to be able to write off that income via your time at a non-profit, the answer is no.
we ran into this with a church project and this is what our accountant told us:
as a corporate entity - be it partnership, llc, llp, pllc, sole proprietorship, s-corp. (anything but a c-corp), you can't deduct 'donated' time because the way those structures work is that your corporate income is your personal income. meaning, whatever we have at the end of the year, as the owners, is taxed at personal income rates. so whatever we bill for but do not receive cannot be 'written off' as a loss, since there was no actual income.
with a c-corp, you can write off the time. but for 99% of small businesses, the general double taxation a c-corp incurs (once at the corporate rate, once again on your personal income) is a greater tax hit than just about anything else. c-corps also have a lot more required paperwork that has to be filed with the state every year. in general, it's a much bigger hassle for a sub-10 person entity.
so, sorry, but i don't think you would be able to. i'd absolutely check with an accountant - hopefully they'll tell you i'm full of it.
and yes, logic would say that your time has value to it - the same basis we did the work for the church in question. however, it apparently doesn't jibe with the actual tax code.
(and really, it makes some sense - otherwise, everyone could 'donate' a huge amount of otherwise non-billable time to try and wipe out their tax liability. it's fraught with potential abuses. like many things...)
"if your assumption is that you can work for a non-profit, be paid, and somehow write off the income as a tax deduction, then no.
if your assumption is that you're making a little bit of money on the side and want to be able to write off that income via your time at a non-profit, the answer is no."
thanks for the clarification but I would not be making a dime for this work... I won't be earning a paycheck and just expecting to be able to both pocket it and claim it...if that changes anything. Probably not...
working as a non-profit design researcher
In summation: I'm unemployed and looking for design work to keep the architecture stew in my head stirred up and have a question regarding some work I am pursuing.
Question: Is there a way to work for a non-profit and be able to claim that work as a tax deduction as if I were providing a pro-bono professional service at a junior arch / intern arch / graphics specialist? I am not licensed and do not have my own company established (yet). Would I need to establish my own .llc or .pllc to claim it on my taxes?
thanks!
if you have no income, there is nothing to deduct from. i don't understand your question.
true.
My (perhaps ignorant logic) makes me think that there is some market value (...or not in this market) for my services. Even though I'm not taking a paycheck, I'm still providing a professional service like a lawyer/doctor would when taking on a pro-bono case/patient. This of course, assumes that you can say I worked X hours for Y client and would have gotten paid Z. Then Z comes out of my taxes...
I'm not an accountant and obviously don't know much about this topic yet ...so maybe it can't be done, that is the question.
won's right, if that's the assumption.
if your assumption is that you can work for a non-profit, be paid, and somehow write off the income as a tax deduction, then no.
if your assumption is that you're making a little bit of money on the side and want to be able to write off that income via your time at a non-profit, the answer is no.
we ran into this with a church project and this is what our accountant told us:
as a corporate entity - be it partnership, llc, llp, pllc, sole proprietorship, s-corp. (anything but a c-corp), you can't deduct 'donated' time because the way those structures work is that your corporate income is your personal income. meaning, whatever we have at the end of the year, as the owners, is taxed at personal income rates. so whatever we bill for but do not receive cannot be 'written off' as a loss, since there was no actual income.
with a c-corp, you can write off the time. but for 99% of small businesses, the general double taxation a c-corp incurs (once at the corporate rate, once again on your personal income) is a greater tax hit than just about anything else. c-corps also have a lot more required paperwork that has to be filed with the state every year. in general, it's a much bigger hassle for a sub-10 person entity.
so, sorry, but i don't think you would be able to. i'd absolutely check with an accountant - hopefully they'll tell you i'm full of it.
and yes, logic would say that your time has value to it - the same basis we did the work for the church in question. however, it apparently doesn't jibe with the actual tax code.
(and really, it makes some sense - otherwise, everyone could 'donate' a huge amount of otherwise non-billable time to try and wipe out their tax liability. it's fraught with potential abuses. like many things...)
"if your assumption is that you can work for a non-profit, be paid, and somehow write off the income as a tax deduction, then no.
if your assumption is that you're making a little bit of money on the side and want to be able to write off that income via your time at a non-profit, the answer is no."
thanks for the clarification but I would not be making a dime for this work... I won't be earning a paycheck and just expecting to be able to both pocket it and claim it...if that changes anything. Probably not...
no pro-bono work... not worth it..... work on competitions or look into other fields for work
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