The donation of professional accounting services is attracting new attention with today’s economic downturn, as independent professionals turn to alternative means of charitable giving. A donation of services can be a good way to earn a break in taxes and market one’s brand, all while doing some good for the community. Charitable organizations face difficulties with accurate record-keeping during several periods throughout the year. Overall, making a donation is usually seen in a positive light, but is it professionally advisable for accountants to donate their services? Also, if so, when should such donations take place? Here are a few points to bear in mind, if you’re of the mind to make a donation of services.
Accounting Features Specialized Skills
As the professionals of a skilled trade involving fields of expertise not possessed by the general public, accountants are considered to have a specialized skillset. This, plus the specific nature of their expertise, makes their services particularly valuable to charitable nonprofit organizations. A charity needs to maintain precisely accurate records in order to retain its nonprofit status, and their expenses are closely monitored by the IRS. As an accountant, you can help them maintain accurate records of their donations (including your own) to ensure that no mistakes are made in dealing with the government.
Accounting Service Donations During the Holidays
Many nonprofit organizations are very busy during the holidays. There is often a shortage of volunteers, as well as an abundance of activity, including charitable gift-giving and families in need of assistance. By donating professional services during the holiday season, you provide assistance during a time of year when it is sincerely needed. This reflects very highly on your brand image. Accounting services are in particular need, in order to keep accurate tabs on incoming donations (and outgoing expenses).
Donating Accounting Services during Tax Season
Depending upon the nature of an organization, this may or may not be a critical time of year for accounting services. Many organizations file tax information on a more regular basis, with information being submitted to the IRS quarterly. Whether annually or quarterly, however, a charitable organization can always use the oversight of a trained and experienced accountant to make sure that everything is being properly managed.
Always Ensure Fair Value for Donated Accounting Services
An important point in donating accounting services, as with any specialized professional service, is to know the fair value of your donated time and efforts. Knowing the fair value of your services, which may differ from your marketable rates, is a frequently underrated step in donating services. This is important for the purposes of filing your donation with the IRS, as well as for the records of the organization which is benefiting from your services. A fair calculation of this kind of detail is critical to the avoidance of IRS audits.
More About Charitable Giving
The specifics of donating specialized services as tax-deductible pro-bono work aren’t always cut and dry. You can almost awlays deduct business expenses, but whether you can deduct service fees — and what sorts of services are covered — isn’t always so easy to understanding upfront. It is important to know what is and is not tax-deductible when it comes to donating accounting services. It is worthwhile in terms of the promotional effort to donate accounting services at times; just make sure you follow standard IRS protocols.