Deductions for work or contributions to Skyaid.org - a first look July 20, 2000

Countries have very different tax deduction rules.
  Example: Limits on deductions as % of personal income - from Philanthropy and Law in Asia
         Korea 5%, Thailand 10%, Japan 25%, US 50%, Australia no limit. 

The following just applies to the United States

The standard deduction (without itemization) is $7,200 per couple + $700  per dependent

Itemized deductions are only claimed by 1/3 of the US tax payers

The following are some of the categories for itemized deductions::
- State Income Tax
- Real Estate Tax
- Personal Property Tax - car, boat
- Mortgage interest
- Loss
- Job Expenses
- Donations, contributions, or work provided to nonprofit groups (like Skyaid later this year)
    - up to 30 or 50% of income
  

Deduction for professional work given to Skyaid.org

 - It appears that Skyaid will be able to provide tax deductions for professional work at the same rate that it would cost to get the work done otherwise -  typically in the range of $25-$50 per hour.  IRS example: if a top executive donates his time to an organization, the tax deduction can be only for that amount that the organization would have had to pay for 'similar' work.  e.g. ok to deduct say $50/hour, but not say $200 per hour that the person might normally receive.

Lets assume a minimum $5,000 tax deduction for professional work contributed to Skyaid.
    At $25/hour itemization this would be 200 hours
      or 100 hours if the professional's time is worth $50 per hour.

Example - if:
    1) you are in a 33% tax bracket
    2) normally do not itemize
    3) your professional time is valued at $25/hour

Then you will get a $8 /hour ($25 x 33%) tax deduction for those hours greater than the 200 hours minimum to itemize instead of taking the standard deduction.