Finance

Although the most frequently deducted donations are monetary contributions, billable goods and services can also be used as charitable tax deductions, especially if you keep decent records and make an issue of staying abreast of current tax laws. An accountant is useful in answering most of the questions that arise, but doing some basic research on your own will give you a good idea of what to expect before you even file. The IRS homepage itself is a valuable source of information and data and offers answers to many of the most frequently asked questions about charitable tax deductions.

Tips on Making Effective Charitable Tax Deductions
A good first step is determining whether the organization you intend to donate your services or money to is eligible to receive tax deductible contributions in the first place. Most charity organizations are well established and can offer proof of their eligibility in the form of documentation. If your organization is unable to give you the information you need, you can always search for the company or institutions name on the IRS website. (Its worth noting that being tax exempt is not synonymous with tax deductible, and companies that enjoy the former status dont by definition confer the privileges of the latter.

If your contribution is in the form of services, keep accurate records of every billable hour you work for the organization and provide receipts upon request, keeping legible copies naturally for your personal records. If youre not sure what you should be charging for your time, ask around at select companies or among other individuals who perform similar work to get an idea of what amount is fair to deduct. Depending on the organization, you can deduct anywhere from 30 to 50 percent of your donation.

Not only do volunteered goods and services provide great charitable tax deductions, but they also reflect well on your personal or companys record. Charity organizations often publicly acknowledge their benefactors. People prefer patronizing companies and professionals who are engaged in the improvement of the community and will show their support for you by using your product or service.