Question

Self-employed

Forum|Forum|4 years ago
January 26, 2022
2 replies
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I provide a client appreciation day, a so-called coupon for free service hours to my client. Can I still recoup those labor costs on my taxes? Perhaps as charity or some other way to deduct my "gift" to my client?

C

Contented

You can deduct mileage and material expenses. To clarify, are you paying anyone else to do the labor?

K

Kee22Author

No. We (my employee) and I "donate" our time to appreciate the client. A way to give back to them for the work we have done for them.

T

ThomasM125

You can't deduct the value of your time. You can only deduct actually money spent to provide products or services.

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AliciaP1

Yes! You can claim "gift" expense at a reasonable cost rate for your time of service when given. So, if you give a coupon in 2021 for 1 hour of free service you will expense/recoup the service cost when the coupon is cashed in not when given. You expense the rate that you would normally pay an employee or contractor to perform the service.

For instance, if you provide 1 hour of service to your customer/client for $100 but would pay an employee/contractor $30 to perform the service, you will expense $30 at the time the customer receives the service and turns in the coupon.

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