pay you later (even worse)

[Dean May]

You are money ahead just to donate the tuning. If they pay you and you are a
sole proprieter, then you must pay self employment tax on the payment. So if
you charge $100 you will only realize $85 after tax to make the donation. If
you donate $100 then you have to cough up an extra $15. 

I know a guy who did some work for a fellow church member. Instead of
collecting the full fee he had the customer donate a portion directly to the
church. The customer ended up ahead and so did the church. It was a wash for
the guy I know but he felt really good about it. So did the customer.

Dean

Dean May             cell 812.239.3359 

PianoRebuilders.com   812.235.5272 

Terre Haute IN  47802

 


-----Original Message-----
From: pianotech-bounces at ptg.org [mailto:pianotech-bounces at ptg.org] On Behalf
Of David Ilvedson
Sent: Monday, April 14, 2008 8:35 PM
To: pianotech at ptg.org
Subject: Re: pay you later (even worse)

It is sort of like not being able to deduct labor donations...tune a piano
for a church for free?  You can't deduct what your fees would be.   You
could tune, get paid, then donate the $ back...

David Ilvedson, RPT
Pacifica, CA  94044

----- Original message ----------------------------------------
From: "Robert Scott" <fixthatpiano at yahoo.com>
To: pianotech at ptg.org
Received: 4/14/2008 4:24:02 PM
Subject: Re: pay you later (even worse)


>Regarding a tax deduction for bad debts, Gerald asked:

>> Ok Robert. But it can be deducted. Right?

>No, not unless you also count it as income, in which
>case the deduction merely cancels out the addition of
>that income, and it will be the same as if you never
>had the job in the first place.  And you would only do
>that if you were using the accrual method of
>accounting in your business.  The purpose of the
>deduction is not to reward you for failing to collect
>your fee.  It is to rectify the otherwise unfair
>situation where you were being taxed for income that
>you never received.

>Robert Scott
>Real-Time Specialties



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