Gifts in Kind

[gdmn6]

Our pianist is a paid position, however this year she has decided she does not want to be paid and for that to be her contribution. Do I show that as a debit to my payroll line item and credit the income? And how would I show that on a contribution statement for tax purposes if its considered a service?

[NeilZ]

Our pianist is a paid position, however this year she has decided she does not want to be paid and for that to be her contribution. Do I show that as a debit to my payroll line item and credit the income? And how would I show that on a contribution statement for tax purposes if its considered a service?

Here's the question, what about income taxes, Social Security and Medicare. Does she want those paid ?? If so, you should still have her setup in Payroll for those items to be taken out. In V11.x, you can setup an automatic contribution deduction from the payroll, so you should set it up for the remainder.

She really needs to consider this, as she won't be contributing to her Social Security which will reduce her SS benefit when she retires.

I would check with an accountant for any specifics.

[Matt]

Per the 2013 Church and Clergy Tax Guide regarding the deductibility of donated services: "No deduction is allowed for a contribution of services. Church members who donate labor to their church may not deduct the value of their labor". It goes on to say "The value of personal services is never deductible as a charitable contribution". So the proper procedure to follow is to pay the pianist. Then she can turn around and donate the money to the church if she so chooses.