Business taxes got you beat? Here’s a great write-off you may not have thought about
Like many small business owners, I CRINGE, everytime tax season rolls around. Tax planning is tough and I always rely on my CPA to help here, but over the years I’ve learned a few tips and tricks to help minimize my tax liabilities aka save money wherever I can.
We all know the most common types of business expenses you can write-off:
Office & Home Office expenses
Professional Services fees (like accountants, lawyers, biz coaches)
Courses and Continuing Education
Health Insurance Premiums
A little known tax deduction is called an “in-kind” donation. That means you are donating your professional goods and/or services to a 501(c)(3) non-profit corporation, basically a non-cash donation.
Think about it this way, if you sell Instagram templates and want to make a donation of 100 templates to a non-profit, you can literally expense or write-off the cost of those 100 templates. The same goes if you were to donate used office furniture for example, but the write-off would be for the fair market value of that furniture at the time of donation. Pretty cool, huh?
When it comes to an “in-kind” donation of your services, it’s a bit more complicated. Generally, donation of personal services is not tax deductible, but professional services are deductible if supported by provable expenses such as payroll cost of an employee’s time that went towards the “in-kind” donation.
If you have any questions about how an “in-kind” donation could benefit your company or your charitable interests, check with your local tax professional such as a CPA.
“We make a living by what we get, but we make a life by what we give.” -Winston Churchill