Many nonprofit arts organizations have board members or other affiliated parties who offer their services free of charge or at a reduced rate to support the organization.\u00a0 Is it possible for the nonprofit organization to give a tax letter for the value of the donated services? If so, under what circumstances and how should it be handled to comply with tax rules? Examples would be a photographer who gives her services at a reduced rate or an advertising agency that offers graphic design services free of charge.<\/em><\/p>\n Thanks for a great question \u2013 one which causes a good deal of confusion in our industry.\u00a0 The value of services donated to a nonprofit organization is NOT deductible.<\/p>\n However, one who donates such services may be able to deduct certain amounts that she pays for expenses incurred while donating services to the charity.\u00a0 To be deductible, those amounts must be:<\/p>\n Here are a few examples of what types of expenses are \u2013 and are not \u2013 deductible:<\/p>\n Note that to claim any of these expense deductions, the services provided must be to a registered 501(c)(3) organization.\u00a0 Also, while a written statement from the organization isn\u2019t necessary for these expenses, it is a good idea to keep written records (and receipts, if they exist) for these expenses, and any other tax deductions you intend to take!<\/p>\n ________________________________________________________________<\/p>\n For additional information and resources on this and other\n
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<\/a> legal and business issues for the performing arts, visit ggartslaw.com<\/a><\/p>\n