Can my Business deduct Charity/Pro-Bono work for which I was never paid? – Singletrack Accounting

Charity/Pro-Bono work as a business deduction?
This answer is YES, you can deduct your expenses and you already have!

This is a very common question with an answer that may be difficult for laymen to understand.

Short Answer Any expenses that your business incurred in performing Charity/Pro-Bono work have already been captured as they cleared your bank/through the bookkeeping process.

The "loss" has already been taken, because all of your expenses have been recorded but no income has been received for the pro bono work. I.E. you incurred expenses for the work, that were never recovered because no income was ever received. That creates the loss.

Long Answer Your next question is likely "what about the value of my time?". If you want to enter an expense that is not paid for, e.g. an estimated value of your time, then the other side of that expense entry would have to be to Income. In other words, we can enter such an expense, but it would have no value or net effect to your books...the same amount would be booked to both revenue and expense, so the net income change is $0.

Want to understand more? In double-entry cash-basis accounting, there are two sides to every (i.e. debit and a credit) to every transaction. For an expense that you pay for, the other side is normally to cash or a credit card or however it is paid. For an expense that you didn't pay for (i.e. your time) the other side must be Income.