It is great to give your money to worthy charities, but it can be an even more fulfilling experience to volunteer your time for a good cause. However, you may be wondering if you can claim deductions for the time that you volunteer in the same way that you can deduct charitable contributions.
In short, the answer is no. You cannot deduct your time or services for a charitable organization. However, you can deduct travel expenses associated with your volunteering work if you can meet the following criteria.
- Qualified Organization – Your volunteering work must have been for an IRS Qualified Organization for the travel expenses to be deductible. Churches, government units, and most non-profit charitable organizations are considered to be qualified organizations. See IRS Publication 526, Charitable Contributions, for details.
Detailed lists of charities registered with the IRS as Qualified Organizations may be found through the “Select Check” tool on the IRS website, as well as through CharityCheck101.org. Churches and government units do not have to be included on the list to be Qualified Organizations. If you are not sure of the status of an organization, check with the IRS directly.
- Reason for Travel – The charitable work must be the primary reason for the travel. According to the IRS website, there must be “no significant element of personal pleasure, recreation, or vacation in the travel.” If you are unsure what constitutes a “significant element," you can check with the IRS – but you are better off with a conservative assumption.
- Sufficient Duties – For the travel expenses to be deductible, the volunteer work that you do must be “real and substantial throughout the trip.” Trivial duties, or duties that only cover a part of the trip, will disqualify the travel expense deductions.
- No Reimbursement Allowed– You cannot deduct any travel expenses for which you were reimbursed. That is clearly double dipping.
Mileage is deducted at an unusually low 14 cents per mile – due to the phrasing in the Internal Revenue Code. This mileage rate is not adjusted for inflation as most reimbursements are. Fortunately, you can choose to deduct your direct expenses instead.
The cost of the gasoline you use (as well as any oil) can be deducted, but you may not deduct maintenance, repairs, tires, depreciation, or insurance costs. Parking fees and toll costs are also deductible. If you took public transit instead of driving, you can deduct those costs as well.
Charity work that requires airline travel, such as assistance efforts for typhoons in Asia, is another type of deductible travel expense. Lodging costs and meal costs for these extended trips are also deductible, assuming they meet the above criteria.
As with any deduction, recordkeeping is critical. You must have a suitable written record covering any deductible out-of-pocket expenses, and for expenses over $250, you will need a written statement from the charity describing your volunteering efforts and verifying whether or not you received any goods or services from the charity.
Large-scale disasters such as Hurricane Katrina or the Haitian earthquake may have special rules as a result of targeted legislation. The IRS Website maintains an “Around the Nation” link with updated information on any special efforts.
You may be generous with your time, but that is no reason not to take advantage of all of the tax deductions to which you are entitled. Verify that your charitable work is for a Qualified Organization, and that you meet the other criteria, and then proceed with your deductions. After all, you have earned them with your good works.
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