Charity Events and Tax Benefits...Are there Any?

[S-Man]

I'm (probably) going to be shooting a charity event next month, and it's to benefit a breast cancer foundation as well as the American Heart Association.

What are the tax benefits (for my photo biz) that I can receive from doing something like this?
Are there any?
If so, what do I need to do to receive the benefits/breaks? (paperwork etc.)

I'm not too bright when it comes to tax stuff, so any help is appreciated.

Thanks

[Outlaw]

With the caveat that it's entirely plausible that I don't know what the heck I'm talking about...

I believe that the tax write-off for donating your services can only be equivalent to the true cost of tangible goods that you provide, and even then, if you're already writing them off as a business expense, you can't write them off again as a donation.

So while you may charge everyone else $1,000 an hour just to shoot, you can't write that off.

And while you may get $100 for an 8x10 from clients, you can only write off your printing cost when donating to a charity.

This is how it has always been explained to me, specifically when I donate photo shoots + print packages for charity auctions. I can say it has a value of $xxx, but there's no write-off to be had.

See this post at PhotoAttorney.com for related reading: Deductions for Donating Photography to Charities.

As always, ask a CPA.

[Jeff Lane]

The IRS rules are really pretty sticky about this (which is unfortunate for me, because I give away a lot of free work to charitable organizations). About the only way you can get anything approaching a tax benefit is to enter into a contract with the charity to charge them, then give them a regular charitable contribution for the same amount.

For example, you could negotiate a contract with the charity and when you reach an agreement on that price, write them out a check for that amount. Then, when you perform the services, invoice them and let them pay you the contract price. Three caveats, however:

(1) You have to trust the charity to actually pay you when payment is due. (That's usually not a problem, but if they're unsatisfied for any reason, or if their cash flow is low at payment time, then ...)

(2) You have to book the payment as revenue, and pay taxes on it just like you would otherwise. That revenue is offset (somewhat) by the charitable contribution, but it's not the same financial impact as if you were getting to take the value of your services as a charitable contribution. This strategy might make sense in a year with low revenues and high expenses (like say, this year for most of the world's entrepeneurs), but it seems like a lot of trouble to me for a little financial benefit.

(3) If it's just TOO obvious (ie., you get the exact payment on the exact day you make the exact charitable contribution), I have no idea how the IRS will look at it. They shouldn't care, because after all, you're booking revenue and calculating tax on it, and you're making a qualified contribution and scheduling it on Sched A just like you're entitled to do. Still, will they make some kind of inquiry into an obviously collusory transaction set to see if there are shenanigans going on? I doubt it, but maybe.

All told, I think that normally it's best to just do the work, enjoy the event, and go in peace knowing you've done a good deed to help your fellow human beings, and not worry about the tax man.