Self-employed

[Kee22]

I provide a client appreciation day, a so-called coupon for free service hours to my client. Can I still recoup those labor costs on my taxes? Perhaps as charity or some other way to deduct my "gift" to my client?

[Contented]

You can deduct mileage and material expenses.  To clarify, are you paying anyone else to do the labor?

[AliciaP1]

Yes!  You can claim "gift" expense at a reasonable cost rate for your time of service when given.  So, if you give a coupon in 2021 for 1 hour of free service you will expense/recoup the service cost when the coupon is cashed in not when given.  You expense the rate that you would normally pay an employee or contractor to perform the service.

For instance, if you provide 1 hour of service to your customer/client for $100 but would pay an employee/contractor $30 to perform the service, you will expense $30 at the time the customer receives the service and turns in the coupon.

[Kee22]

No. We (my employee) and I "donate" our time to appreciate the client. A way to give back to them for the work  we have done for them. 

[Kee22]

Thank you. What about my time/labor cost for that "coupon?" Can I consider myself an employee in that circumstance and expense my rate as well?

[ThomasM125]

You can't deduct the value of your time. You can only deduct actually money spent to provide products or services.

[Kee22]

So I assume that would apply to the initial free consultation with a client when I access the job? Mileage and the potential expense of my employee's time?

[DaveF1006]

Mileage but not the potential expense of your employee's time.