Can my business deduct consulting services donated to a non-profit?

“If I do service work for a non-profit for free, can I deduct it as a charitable donation?”

Regardless of whether you charge clients a fixed hourly rate, you can’t take a charitable deduction based on the number of hours you spend providing consulting services to a non-profit. In fact, the IRS never allows businesses to include the value of time or the income lost when calculating a charitable donation deduction that relates to the provision of services. You can, however, deduct other costs incurred that aren’t reimbursed, are directly connected to the consulting services and for costs the business wouldn’t have incurred but for the donation of consulting services. Typically, deductible costs cover car expenses, such as gas, oil, tolls and parking fees. And if your consultation requires travel away from home, hotel and transportation charges can be deducted as a charitable contribution. Not deductible, for example, is a portion of the payments made to lease office space since the business incurs the expense regardless of whether the consulting services are donated or not.

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