I run a licensed dog boarding kennel out of my home. There is a local 501c3 Rescue that wants me to board some of their animals but they can't afford to pay. Can I write the fees for boarding off on my taxes as a charitable donations?
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No, you cannot deduct the services you provided for free to the 501(c)3 organization as a donation, because you never included income from these services as taxable income.
Can you expand further? I do claim income from the dog boarding business on my taxes. Are you referring to claiming income specifically for the non-profit?
Follow up - if I gave them a discounted rate but still charged, could I claim the difference on my taxes?
As Minh said, you can't claim a write-off for income you never got. So even if you discounted the fees, you can't write-off the income that a non-discounted customer would have paid.
If, however, you have "hard" costs for these dogs that you are boarding (like dog chow, vet visits, etc.), you can deduct these. You should create a list of these hard costs as you make them and connect them to this non-profit. You should document this carefully, as any audit will want to make sure that you are not mixing personal expenses or your regular business expenses in with the contributions to the non-profit.
Okay, so even though I would be giving up space that a paying boarding customer would use, I would have nothing to claim as a deduction for the lose of income on that space?
But if I made them pay full price and paid taxes on it, then I could give them a cash donation in the amount of their bill and I would be able to write off a charitable donation?
I just want to be sure I'm understanding this because I often hear groomers saying they provide free services to rescues and use it as a tax write-off so I'm not sure I see a difference.
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