Amelia, an accountant, normally bills her clients $125 per hour for her time and her adjusted gross income for 2018 was $100,000. In January and February 2018, however, Amelia spent 80 hours of her time volunteering for the Salvation Army doing accounting work. She paid $100 out of her own pocket for supplies and made an additional cash contribution of $1,000 to the Salvation Army in 2018.What is Amelia's charitable contribution deduction for 2018?

Question

Quizplus · Accepted Answer

Amelia can deduct the actual expenses she incurred while volunteering, which in this case is the $100 she spent on supplies. She can also deduct the value of her time spent volunteering at the rate she normally charges her clients, which would be $10,000 (80 hours x $125/hour). However, she cannot deduct the value of her time as a charitable contribution, only the actual expenses she incurred. In addition, her cash contribution of $1,000 to the Salvation Army is also deductible. Therefore, her total charitable contribution deduction is $1,100 ($100 + $1,000).

Amelia, an Accountant, Normally Bills Her Clients $125 Per Hour