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November 2012

As a Fitness Professional, Can I Write Off Pro Bono Work?

 

By Carrie Myers

Q:   I sometimes offer one-on-one training to an individual in need of a personal trainer, but who cannot afford my services. While I do this because I want to help him, I’m wondering if I can write off on my taxes the time I spend with him?

A:   What you are referring to—offering your services free of charge—is technically considered pro bono training. Pro bono is Latin, meaning, “for (the) good, rightly, morally” or “for the public good.” It is often associated with legal services, but fitness professionals can also offer their services for free to the underserved or even as a charitable contribution to a nonprofit organization (as an auction item, for example).

While it would certainly seem fair that you could deduct the time you spend volunteering to help someone, because you are in essence losing income during that time, the IRS does not share this viewpoint.

“Unfortunately, the normal tax treatment is that service providers can write off the costs to carry out the pro bono work, but not its retail value,” says Gary W. Patterson, the FiscalDoctor®, author of the forthcoming book Million Dollar Blind Spots: 20/20 Vision for Financial Growth.

What qualifies as the cost to carry out the pro bono work? “In general,” says Kate Taylor Battle, a Chicago-based attorney and marketing consultant, “if the expense benefits a qualified charitable organization, it may be deductible.” 

Specifically, according to the IRS, “Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be: unreimbursed, directly connected with the services, expenses you had only because of the services you gave, and not personal, living, or family expenses.”

“This includes expenses for travel-related costs, such as gas, taxis, shuttles, trains, lodging, meals, office supplies, voice and data communications, filing fees, postage and other expenses necessary for providing charitable services,” explains Battle. “It does not include travel expenses during a vacation or recreational activities or personal property used while providing pro bono services. You can, for example, deduct [things like] maintenance costs for the printer, such as paper and ink used for the purposes of providing pro bono services.” 

Battle suggests keeping all of your receipts and a mileage log that you can give to your accountant or tax preparer to help guide you through the proper steps.

So what is a qualified organization? “Usually, an organization will be able to tell you if it is qualified,” says Battle, “but you may also search a list of qualified charities on the IRS website by clicking on ‘Exempt Organizations Select Check’ at www.irs.gov/charities or by calling 877-820-5500.”

While individuals do not count as “qualified organizations,” you may be able to write off associated costs if you gained that client through a qualified organization to which he or she belongs. For instance, if your client receives assistance from an agency in your area that provides care to disabled individuals, and you went to the organization offering your services, you may be able to write off some of the costs, because you are now offering your services to the agency. However, always check with your tax preparer before assuming you can write anything off. And make sure you have hard-copy proof of your costs, as well as a copy of your contract with the agency.

In the end, if you are not able to write off anything related to your pro bono work, the gratification that comes from offering your time, attention and expertise to those who need them, but can’t afford them, far outweighs the benefit you might gain from a tax deduction. 


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