Volunteer Tax Deductions
With tax season upon us, I thought I would share some tips on taking deductions on volunteering activities.
If you volunteer regularly or are considering doing so, you will definitely want to get the most out of your volunteer experience. Volunteering should be fulfilling and, whenever possible, fun. Most of all, you should be volunteering because you believe in something and/or want to help people. But just because you don’t get paid for your work doesn’t mean you should ignore other compensation you can get.
In the United States, when you volunteer you cannot deduct any value of your time itself. Although the organization you are working for can claim your time as in kind donation, you cannot deduct this from your taxes. Other expenses that you may incur while volunteering, however, are fair game.
So what can you deduct and how do you do it? More than anything, track your expenses.
If you travel, even around town, for your volunteer work you should be eligible to deduct travel expenses and/or mileage. For travel, you can either deduct your expenses themselves such as gas money that is specifically related to your volunteer travel, or you can choose to use the standard mileage deduction to calculate your expenses so that you only have to track your mileage.
If you have to travel out of town, and be sure to track and deduct your expenses then as well. Plane, train, or bus fare can be deducted as can the lodging expenses incurred if you stayed at a hotel or motel. You can also deduct the cost of your meals.
While you are volunteering, if you have to purchase specific uniforms or clothing, these are eligible deductions as well. Other supplies that you may need such as art supplies, school supplies, office supplies, and more can likewise be deducted as long as you retain your receipts for these purchases. If you care for a child or animal and that has been placed with you by an organization you can also deduct directly related expenses for their care. For example, if you foster pets until they are adopted out, pet food, bedding, and even vet bills may be eligible for deductions.
There are, however, a few key issues in claiming tax deductions for volunteer work. First of all, they will only apply to eligible organizations – specifically, 501c3 nonprofit organizations or religious institutions. There are some nonprofit organizations that have not received their nonprofit 501c3 status by the government; be sure to check with the organization you volunteer for to ensure that they are eligible.
It is also extremely important to make sure that any deductions you are claiming are directly related to your volunteer efforts. If you purchase a shirt that you happen to wear to volunteer, this would not be eligible deduction. Alternatively, if you purchased a specific shirt solely to volunteer in it as required by the organization’s dress code, then it would be an eligible deduction. When you travel, lodging and meals may be covered but if your spouse accompanies you and does not volunteer with the organization, their travel expenses will not be covered. This is why it is of the utmost importance that you track your spending carefully.
Although you are volunteering without any expectation of pay, the reality is that you may find yourself having to spend money in order to volunteer. Be sure to get the most out of your experience by claiming deductions on eligible expenses. You don’t want to find yourself having to quit volunteering because of the costs involved when you could have gotten credit with the IRS for the money you have spent.