Donations of time or services are not deductible. It doesn’t matter if it’s work needing significant experience and expertise that would be costlier to the charity if it needed to pay for it, such as expert carpentry or legal counsel or if it’s simple secretarial work, such as checking in attendees at a fundraising event.
However, you potentially can deduct out-of-pocket costs associated with your volunteer work.
The basic rules
As with any charitable donation, to be able to deduct your volunteer expenses, the first condition is that the organization be a qualified charity. To find out if your charity is qualified, the IRS’s “Tax-Exempt Organization Search” tool (formerly “Select Check”) at https://www.irs.gov/charities-non-profits/tax-exempt-organization-search to find out.
Presuming the charity is qualified, you may be able to deduct out-of-pocket costs that are:
- Directly connected with the services you’re providing,
- Incurred only because of your charitable work, and
- Not “personal, living or family” expenses.
Supplies, uniforms, and transportation
A vast assortment of expenses can qualify for the deduction. For example, supplies you use in the activity may be deductible, along with the cost of a uniform you must wear during the event may also be deductible (So long as it’s not something you’d wear outside of volunteering).
Cost of transportation to and from the volunteer activity usually are deductible, either the total cost or 14 cents per charitable mile driven. However, you must be the volunteer. You can’t deduct the cost if, say, you drive your elderly mother to the nature center where she’s volunteering.
You also can’t deduct transportation costs you’d be acquiring even if you weren’t volunteering. For example, if you take a public train downtown to work, then walk to a nearby volunteer activity after work and take the train back home, you would not be able to deduct your train fares. However, if you take a cab from work to the volunteer activity, then you can, maybe, deduct the cab fare for that part of your transportation.
Transportation charges may also be deductible for out-of-town travel related to volunteering. Out-of-town travel can consist of plane tickets, driving expenses, taxi, rail and bus transportation or other transportation expenses between an airport or train station and anywhere you are staying. Meal and housing expenses may also be deductible.
The key to deductibility is that there is no significant element of personal pleasure, recreation or vacation in the travel. According to the IRS, you must be volunteering in an honest and considerable sense during the trip, but, they would not merely deny the deduction for travel expenses because you enjoy providing services to the charitable organization. However, if only a minor part of your trip includes volunteer work, your travel expenses generally would not be deductible.
Keep careful records
It’s important to keep meticulous records because the IRS may challenge charitable deductions for out-of-pocket costs. If you have questions concerning what volunteer expenses are and aren’t deductible, contact us.
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Ben R Shull CPA LLC provides clients with tax, transaction, and advisory services. The insights and quality services we deliver help lead our clients through the next generation of changes, and accelerate growth while reducing risk. CPA Katy, TX.