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OT: Need advice on budget for tax write off
I recently worked on a video project for the non-profit organization I work for, however this project was not part of my daily job for them, but something on the side that I decided to donate because of the way the economy is in right now and the fact that money is more than tight in our local chapter. I will, however, make sure to write this off in my taxes come February, but because I’m not a professional in this area I have no idea how much should I charge for all the work that I did. Even though I work for them as permanent staff, since this is not not part of that I will refer to them as the customer.
I will type a description of my work here and if some of you could tell me what is normally charged, or what you would charge for something like this, I would greatly appreciate it. I have to present a form to the organization a copy of which will be included with my taxes. Following is the overall description of my work for this event.
This was a big concert at a local venue, and also two other minor ceremonies the day before. Among other things my work included:
– Brainstorming about the layout and source material for the different videos needed to promote the concert, and to be shown to the concert attendees
– An estimated 50 hours of editing in Vegas over a month from the first drafts, showing them to the client, applying corrections as requested and replacing new source material as it was given to me, until the final videos were turned in to the customer.
– Video recording two people talking about issues related to the purpose of the concert, which took about 90 minutes for both, which were to be included on a video projected at the concert.
– Taking my workstation to the customer’s location on two occasions because of time constraints that made that option more viable than the customer coming to my home office.
– Video recording of a ceremony that took about 90 minutes of my time
– Video recording of a concert the next day that took about 6 hours of my time
– Editing of both the ceremony and concert and for final delivery on DVD, an estimated 7 or 8 hours of added work.
– There were a total of three videos made:
1) One DVD that was sent to VIP guests as an invitation for an event prior to the main event,
2) One video which was to be put online, although at the last minute some disagreements between the customer and the artists’ reps prevented it from approval by them, however the video was already produced,
3) One video that included two interviews video recorded by me as well as some editing of older footage provided to me by the organization, which was burned onto DVD and projected at the concert.Any help on this would be much appreciated, not only because I need it for this but because I intend to this kind of work for a living and I don’t know much about pricing of video recording and producing. If for whatever reason you would prefer to keep your price estimate private you can e-mail me at se***@**ve.com.
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32 Replies
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Sebastian,
Simple answer, establish a day rate and multiply that by the number days it took you to complete the project. Break it down in a manageble list for the client similarly to what you have above.
More importantly, don’t wait until after the fact to start getting paid. One third or one half up front is the way to think, and that figure can be based upon your estimate rather than a fixed flat price if you put that into your invoice or production agreement.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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Sorry to be a wet blanket, and… I’m not an accountant, nor a tax attorney, BUT… I don’t think you can write off your own labor when donated. You can write off things like mileage, tape costs, etc. — things that cost you money. Please check with a professional tax preparer. This was the advice given by my accountant.
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I’m pretty sure you can donate services. The donation form my organization gave me, which is used routinely, has two options, Products or Services, and I know from the people there that handles that sort of thing that many people donate services which later they write off, for which this form is necessary.
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Possibly the difference is one of locale. I’m told that in the US I cannot deduct from my taxes for any professional time I choose to donate. If you are in the US Sebastian perhaps the “donation form” has no tax significance and is for just that, a donation. Then again, if you’re NOT in the US, the laws may be very different.
Just to be sure, I’ll ask my accountants again.
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I’m in the US, and while I don’t have the form with me now at home, I remember it’s a standard form, not something improvised by my office. I’ll check better on Monday though.
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Or… if you are an employee of the entity to whom you are donating you may very well be able to take employment hours and donate them. As a self-employed individual I am not (I’m told) able to take any form of tax deduction for my time.
It will be interesting to see what we both find out.
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I apologize for misreading the initial post Sebastian — it was long and I was hurried.
However, I do agree with Nick’s initial take. I’m pretty sure you can only write-off tangible donations such as goods and cash.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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But do you guys usually send some sort of information to the organization that you donated goods and services to that spells out the value of what you donated – of course noting that it was donated so they don’t owe you anything?
Not necessarily an invoice, since you don’t want anyone to get mixed up, but perhaps a letter or something that still sums up the value of the donation (if it had been purchased) for everyone’s records?
You certainly don’t want to be tacky, but it seems that a “paper trail” might still be useful for a number of reasons – even if no fee is charged, exchanged or owed.
Thoughts?
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Actually I was going to include that in my post and I forgot, so thank you. I do not have a video business yet, I hope to start one, but I have an invoice template that I downloaded from the net and I added my logo to. I used that template to invoice them for some VHS to DVD transfers I did for them, and I was planning on using it for this as well with a discount for the total value I assign to it. Would that be the way to go?
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You can’t write off your donation of time in the United States. Sorry, but that is the reality. Otherwise every volunteering parent, holiday meal delivering, Kiwanis member, etc. could have a huge deduction every year.
Sorry man. The good news for a business that volunteers their employees time is that the employees pay is still a deductible expense. But the employee gets no credit even if he volunteers to work for free.
Terence Curren
http://www.alphadogs.tv
http://www.digitalservicestation.com
Burbank,Ca
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