Sunday, August 27, 2017

Can I deduct the cost of a cup of coffee if I donate my time?



For several years, A.L. has supported a local nonprofit by donating her time as a job skills coach to unemployed adults who use the nonprofit's services to help them find jobs. It's a cause A.L. believes in and she's seen how successful the nonprofit has been in helping provide advice and skills to people trying to get on their feet.

A.L. has committed to donating two hours of coaching a week to clients of the nonprofit. At scheduled times she drives her car to meet the client either at the nonprofit or at a coffee shop that is conveniently located for each of them to reach.

"I love working with these clients," writes A.L. "It gives me the opportunity to give back to my community by using the professional skills I've developed over the past few decades."

And the clients she's worked with seem to benefit from the advice A.L. gives them on thinking about the type of work they can do, writing strong resumes and cover letters, and learning how they might successfully navigate job interviews. The confidence the clients get from their sessions with A.L. often helps them land a job that they might otherwise not even have thought of applying.

Even though others might have paid handsomely for her services, A.L. knows that she cannot deduct the value of her donated time from her income taxes at the end of the year.

"Frankly, I don't do this for the tax deduction anyway," she writes, noting that it's the thought of giving back that drives her to donate her time.

But over time, she racks up quite a few miles driving to and from her meetings with these pro bono clients and she also spends money on coffee and sometimes a light meal when meeting at the coffee shop. Now, A.L. wonders if it's both legal and ethical to deduct some of the expenses she's incurred while coaching the clients she sees.

I am neither an accountant nor a tax attorney, so A.L. would be wise to consult with a tax expert for specific details about what's permissible and what' not. But both the U.S. and Canada provide guidance that suggests that certain expenses incurred specifically in relation to the time donated to a charity could be deductible. (It seems unlikely, however, that taking deductions for the expense of a two-week trip to a fancy resort where you meet the client briefly and spend the rest of the time vacationing would be appropriate or legal. But again, check with a pro.)

So, yes, it's likely that the mileage and the cost of a meal might be legally deductible when incurred while volunteering time. But even if it's legal, A.L. wonders if it's right to take the deduction, given that she expected to be volunteering her time. As long as she doesn't violate any tax laws in the process, there's nothing wrong with taking the deductions from her annual tax obligation and doing so doesn't lessen the intent of the time she has devoted to the client or the nonprofit.

The right thing is for A.L. to continue to donate the time and services she wishes to donate and to take any legal tax deductions for related travel expenses with a clear conscience. 

Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a senior lecturer in public policy and director of the communications program at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues. 

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net. 

Follow him on Twitter: @jseglin 

(c) 2017 JEFFREY L. SEGLIN. DISTRIBUTED BY TRIBUNE CONTENT AGENCY, LLC.


Sunday, August 20, 2017

How can I pay if I don't know the price?



M.N. never knows when his company cafeteria is going to be busy during the summer months, particularly in August when many of his colleagues tend to take time off for a summer vacation. During the rest of the year, M.N. tends to try to time his cafeteria visits to early or late during the breakfast and lunch hours in an attempt to avoid the crowds.

Last week, however, M.N. writes that he woefully miscalculated. When he got to the cafeteria there was more of a crowd than he anticipated, partly, he suspects, because it was a rainy day and more of his colleagues had chosen to eat indoors than to venture outside to nearby restaurants or convenience stores for dining options.

It turns out that there was also a conference occurring on the premises, so many outsiders were visiting his company and they too were using the cafeteria facilities.

"The lines were long, but I was already there, so I chose to stay and wait it out," he writes. M.N. loaded up a container from the salad bar, grabbed a soft drink from the cooler, and then waited on one of the checkout lines for a cashier to weigh his salad and ring him out.

After a few minutes of waiting, one of the chefs came out from behind the counters and started to walk up to people she recognized who were waiting on line.

"You eat here regularly, right?" she asked a few employees ahead of M.N. in line. When they acknowledged that they did, the chef told them to take their purchases and pay up later in the week.

As the chef made her way down the line, she recognized M.N. as a regular customer and instructed him to do the same so they could cut down on the amount of people waiting in line. M.N. thanked her and headed out of the cafeteria to bring his salad and drink back to his office to eat.

"After I'd eaten my salad, I realized I had a problem," writes M.N. "I have no idea how much my salad weighed, so I don't know how much I owe them."

Now, M.N. writes that he feels like he's at a loss about the right thing to do. Since it's unlikely anyone will chase him down to pay for his lunch, should he just forget about it? Or should he explain his conundrum to the cafeteria staff?

Simply neglecting to pay and hoping the situation will go away is rarely a good option, particularly since M.N. received goods for which he owes money. But he's right in feeling lost about how to calculate what he owes. If he generally pays a similar amount for his salads each time, he can offer to pay that. But the right thing to do is to chat with the cafeteria manager and let her know he's willing to pay, but isn't sure how much.

The chef would have been wise to let those having items to be weighed know how to proceed before she dismissed them. But given that she didn't, the right thing for the cafeteria manager to do is to either work out a suitable payment for the items consumed, or, given that M.N. is a regular customer, offer him this one lunch on the house. 

Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a senior lecturer in public policy and director of the communications program at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues. 

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net. 

Follow him on Twitter: @jseglin 

(c) 2017 JEFFREY L. SEGLIN. DISTRIBUTED BY TRIBUNE CONTENT AGENCY, LLC.


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