Why Artists Don't Get a Charitable Deduction for Donating Their Artwork

Hannah Cole is a tax expert who specializes in working with creative businesses and artists. She is also a working artist and a tax and money columnist for Hyperallergic.

Hannah is the founder of Sunlight Tax, which specializes in empowering creative people to set up for long-term success and take control of the financial side of their careers through her year-long artist-centric membership, Money Bootcamp. If you’d like to get a free visual guide to artists’ tax deductions and a 3-day Money Challenge, you can find that here.

Artists do not get a charitable deduction for donating their work.

I know this is painful to hear.

And, it is especially painful when an organization asks you to donate your artwork while holding out the promise (or even the suggestion) of a tax deduction.

When I do artists’ taxes, the thing I see that makes me mad enough to flip a table is the artist presenting me with letters from organizations they have donated work to stating the sales price of the artwork. This official-looking letter makes the artist feel like they should be getting a tax deduction. In fact, if some artists have accidentally taken this deduction, despite the fact that it’s illegal, I would point to those letters as the cause of the confusion.

Why can’t professional artists get a deduction for donating their work to non-profit organizations or charity fundraisers?

Let’s get clear on the facts about the tax benefits of deducting your art donations:

When you donate your own artwork, the IRS considers it a “self-created asset.”

The deduction value of a self-created asset is only your cost of materials.

You can’t deduct the retail or sales price of the work
You can't deduct your time or labor.

For most artists, labor is what constitutes most of the value of the work—and it feels painful to look at the retail value and know that it isn’t deductible for you.

But it gets worse.

If you are a professional artist, you are likely already deducting your supplies expenses for your business. The IRS never allows “double-dipping.” This means that you already deducted that supplies expense, and you can’t deduct it again when you donate that work to charity.

In other words, if you deduct your supplies expenses as an artist (and I hope you do!), then you don’t get any deduction for your donated artwork. None and never.

A helpful note about taxes for artists:

A lot of people get business deductions confused with itemized deductions, and they are not the same thing. You do get to take all your business deductions, so long as you have a “profit motive” in your art practice—AKA you aren’t a hobbyist.

But, charitable deductions are itemized deductions, not business deductions. This podcast episode clarifies the difference between business deductions (which you likely do get) and itemized deductions (which you likely do not get).

So, you’ve just learned that you do not get a deduction for donating your work to charity, what now?

How should you proceed with deducting those art donations?

Here's what we recommend, to help you be generous without feeling exploited:

Create a donation budget. Decide what is a reasonable amount of artwork for you to donate each year. It might be zero. You get to decide. When you’ve donated your full budget for the year, say to the next organization that asks you to donate, “I’ve already met my donation budget for this year, but you can ask me next year.” This keeps you in control and helps you avoid feeling exploited.
Talk to the organization that’s asking you to donate. Tell them that artists do not get a deduction for donating artwork. The organization should be aware of this, and they should never solicit artwork donations with the promise, or even suggestion, of a tax deduction. I would like it if they stopped sending out letters to artists listing the retail value of the work—it is very misleading.
Ask the organization if there are other benefits they can provide to donating artists. Publicity? Use of materials or facilities? Introductions to collectors? Even better, a share of the proceeds when your work is sold.

Don't let this discourage you from getting into the holiday spirit and offering support to charitable organizations that need it.

However, it’s still a good idea to educate the charities about the lack of tax benefits to artists.

You can still receive a benefit from that organization, and this information might help you feel more comfortable asking for it. Artists are big-hearted and will continue to be, even without getting a tax deduction. But, setting boundaries for yourself will protect you from feeling used and allow you to feel generous.