LinuxSA Mailing list archives

  From: Alan Kennington <akenning@topology.org>
  To  : LinuxSA <linuxsa@linuxsa.org.au>
  Date: Wed, 20 Jun 2001 16:31:51 +0930

Re: tax deductions for non-compulsary software payments

On Wed, Jun 20, 2001 at 04:17:18PM +0930, David Tanti wrote:
> In response to your Case B scenario
> 
> 1. People giving money to this person cannot claim a tax deduction unless
> this person has been hired by them to write specific software for their
> business.  You cannot claim it as a donation unless the person/business is a
> charitable institution.
> 


David,

Well, that knocks out that idea.
Your word "specific" cuts out my original idea.
But it suggests another idea to me.
Maybe I should get them to send me an invoice
_not_ for software development, but for a support contract.

REferring to John Edwards' reply:

--------------------------------------------------------
Why not just contract the author or their organisation to do $X hours of
work on the open source project at $Y/hour.

Then you not only have a legitimate business expense, your business can
show how they contributed to the development of that project, and how
gurus of the open-source world have been in your employ.  
--------------------------------------------------------

it looks like it should be fine if the author quotes an
hourly rate for _support_, and then I can send an amount
for Y months of support or something.

I know that this has all been thrashed to death
years ago in the context of _compulsary_ payments for
support of open source software, which some people think
is a good model for making a real living, but in the
voluntary context, it's a bit tricky.
This is especially so if the author gives free support
anyway in the form of a majordomo-style mailing-list.

I think that solves it.
But it would be nice to know that someone somewhere
out there had actually made a tax claim for a 
voluntary payment and had cleared it with an accountant.

If this _is_ the right way to do it, then the author would
have something like this on the website:

---------------------------------------------
  Basic support: $Y/month.
Premium support: $Z/month.

I will send you a receipt/invoice for any payment...
Please pay in advance by cheque in currency Blah.
---------------------------------------------

Then the user can make a tax-deductable donation
by paying for the support, but not necessarily
use that service.
I guess that's how it works when I buy the
"CD in a box" method of software delivery.
I just don't use the support mostly. But I still
claim the support component of the software payment.

Anyway, it's too late this finanical year.
I'll try to get it right  in FY 2002.

Cheers,
Alan Kennington.

-- 
LinuxSA WWW: http://www.linuxsa.org.au/  IRC: #linuxsa on irc.linux.org.au
To unsubscribe from the LinuxSA list:
  mail linuxsa-request@linuxsa.org.au with "unsubscribe" as the subject