It’s that time of year again — the dreaded tax season is upon us. Oh what fun! –not really.
Ok, so I’m not a tax expert and I definitely suggest talking to your tax advisor before making decisions about your tax filings. But, when it comes to charitable donations of artwork, it seems many people get it wrong.
When I do shows, I get approached all the time for donations of my artwork. The silent auction coordinator or person in charge of the featured charity makes their way around to all the booths looking for artwork. Inevitably the following phrase is issued from their lips “And if you donate a piece of artwork, you can deduct the fair market value from your taxes as a business expense”. WRONG – under current law an artist who donates their own artwork can only deduct the cost of their materials from their taxes – NOT the fair market value.
Remember the charity’s main goal is to get donations so they can turn around and get money for them. Telling artists that they can get a tax deduction is a nice incentive for people to donate and I’m sure the people making these statements believe what they are saying – but they usually aren’t tax experts either.
That doesn’t mean artists shouldn’t donate. Artists are among the most generous and least well paid individuals out there. We want to give but often the only thing we have to give is our artwork. We just need to be careful and give because we really are interested in supporting the particular charity and not be fooled into giving by some promise of financial reward or benefit.
Read more info about the tax repercussions for artists donating their artwork by Janice Roberg of Roberg Tax Solutions, LLC.
And artist and blogger Helen Klebesadel has some ideas for charities looking for art donations that might go along way toward helping artists. It would be really nice if in the future charitable organizations would take the concerns of their artist donors into account and enact some of these policies.