Charitable organizations are usually dependent on more than just financial donations from contributors. Most charities also rely on individuals to give some of their time in order to promote the goals of the organization. Individuals who volunteer for charitable organizations may be able to take a tax deduction for certain expenses incurred while performing volunteer activities.
The market value of your personal time spent performing charitable work is not deductible. A tax deduction is available only for your actual out-of-pocket expenses. In order to deduct the costs of volunteer service, the organization for which you are serving must be designated by the IRS as a qualified charitable organization.
Churches and government entities are generally considered qualified charitable organizations by default. Most other organizations must submit an application to the IRS before being designated as a qualified charity. Because there are so many charitable organizations, the IRS provides an online tool to confirm the qualified status of organizations eligible to receive tax-deductible donations.
The most common out-of-pocket expense that volunteers are likely to incur is the cost of driving a personal vehicle for the charity. The deductible mileage rate for charitable work is 14 cents per mile. To keep accurate records, a mileage log should be maintained so that you can easily calculate your total charitable miles at the end of the year.
Miscellaneous unreimbursed expenses
An expense must be directly related to your charitable work in order to be deductible. Over the course of the year, you might incur any of the following types of charitable expenses.
- Custom stationery and stamps
- Event publicizing
- Purchase and maintenance of specialized uniforms
The charitable expenses of a volunteer are deducted as an itemized deduction. The tax form used to report itemized deductions is Schedule A. Charitable volunteer costs are reported on the entry line on Schedule A designated for cash and check contributions. The itemized deduction total from Schedule A is then carried to Form 1040.
The cost of travel may be deductible if the trip is exclusively for charitable purposes. To be deductible, there must be no significant element of the travel that might be construed as a personal vacation. The food and lodging expense incurred while traveling overnight must relate directly to your volunteer activity.
A charitable deduction may also be taken for a portion of the cost of providing a home for a foster child. Contact an accountant or tax company, like Balkcom Pearsall & Parrish CPA's PA, for more information on tax preparation services.Share