I live and work in Washington State. I have a LLC. I have donated (and am about to do more) some of my services to some nonprofit organizations in my area and I wanted to make sure that I am doing/ receiving everything necessary to make sure the donations qualify for when it comes time to file my taxes.
Previously I have sent an email laying out what the services will be and what the donation amount is and ask for a confirmation from the non-profit, clarifying that they accept the donation. What I don't know is if I need anything more or different than that for tax donation purposes.
Hi, KH326!
How wonderful that your business is donating services to local nonprofit organizations!
While serving your community is certainly admirable and encouraged, donated services are not tax-deductible at all for businesses or individuals.
Specifically, in Publication 526, the IRS states: "You can't deduct as a charitable contribution... the value of your time or services". However, to the extent that part of your donations includes supplies, you can take a deduction for those items. You can also take a deduction for any products, costs, or expenses you incur that are related to the donated services.
So, your tax return can't take a deduction for the value of your services, but providing free services to your local charities is a great way to get involved in your community.