Hi Anne,
I am donating press release writing services to a non-profit. It’s a worthy cause I believe in and want to help regardless, but it recently occurred to me that these press releases may actually be a tax write-off. Can I write off the normal amount I would charge for each press release? And if so, what paperwork, if any, do I need to get from the non-profit agency?
Thanks in advance for your input and thanks SO much for the great advice and leads you provide with your blog!
H
Hi H,
There’s a reason I call my self a writer! It means I write. I don’t do my own taxes because I find trying to understand the arcane tax code simply makes me crazy. I hire a great tax guy.
The other source I trust completely is Kelly Phillips Erb. She writes the TaxGirl blog. She has an Ask The Tax Girl page – go ask there and come back and give us the link if you get an answer.
Thanks for your confidence in me, but I’m passing on this one.
Do you have a question about freelance writing? Ask Anne, The Writing Pro - that's me ;) Ask in the comments or send an email and put Q&A in the subject line so I can sort it out from spam and I'll do my best. Meanwhile, you'll find some Q&A's here: Ask Anne, The Pro Writer
Write well and often,
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Anne: Apologies, I seem to be blabbing on every one of your posts at the moment. Just wanted to say that this is the BEST advice. It’s so refreshing to see someone say “I don’t know. But I know someone who does!” rather than pretending. Oodles of integrity. Yay, Anne!
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Spike, blab away, particularly with the complements
I had the same thought a few years ago when I started my PR firm – I helped out a few nonprofits as well. The services aren’t tax deductible like products are sadly.
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Jenn–doesn’t it seem like a press release IS a product? It does to me…
I’m not sure but somehow I’ve come to think that putting words on paper doesn’t result in a product in the way the IRS views it. Not unless you’re selling multiple copies like a book, ebook or something… then you get royalties which are taxed more favorably as I understand it. All in the US of course.
Anne’s spot on. When you write a press release for a client, it’s not a product–it’s a service. People are essentially paying for your time and not the end piece of paper (or more often these days a digital file). Unfortunately what it seems like to us (and I do understand where you’re coming from) doesn’t matter. All that matters is how the IRS views it. You’re not donating a tangible product with existing value. You’re volunteering time in a craft instead, and you don’t likely have many, if any, direct expenses involved.
For example:
1. You CANNOT deduct your typical rate for the time spent researching and writing the press release.
2. You CAN deduct for mileage if you have to attend meetings with the client for the project you’re volunteering for.
3. You CAN deduct for things like paper costs if you print up a few hundred copies of the release and phone expenses if you then fax those copies to media outlets and make followup calls. But you cannot deduct for the time you spend doing those things.
The reason is pretty simple – if you could deduct for services, you’re the only one who determines what those rates are. So I could say my time is worth $500 per hour and base it on that. Obviously the IRS isn’t going to allow that. You can only deduct for real expenses, and your service / time charges are not based on real expenses incurred by you. It falls under their rule of not being allowed to deduct for income lost when you choose to take on volunteer projects.
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