If you're one of the millions of Americans who performs volunteer work for charity, you might be entitled to deduct your expenses from your income taxes. To be deductible, volunteer expenses must be:
- unreimbursed by the charity for which the volunteer services are performed
- directly connected with the volunteer services
- incurred only because of the volunteer services, and
- not personal, living, or family expenses.
Example: George Jones sent $500 on car expenses and parking while volunteering for Acme Charities during the year. Acme does not reimburse him for this expense. He may deduct $500 as a charitable contribution.
A volunteer can deduct unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of his or her car in giving services to a charitable organization. However, volunteers cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.
There are two ways volunteers can keep track of their car expenses. First, they can keep track and document what they actually spend for gas while volunteering. If they don’t want to bother keeping track of actual expenses, they can use a standard mileage rate of 14 cents for each mile driving while volunteering. Given the cost of gasoline today, the 14 cent per mile limit is absurdly low, so volunteers would be better off keeping track of actual driving expenses. Whichever method is used, volunteers can deduct parking fees and tolls.
Travel expenses are one of the most common deductions by volunteers. These include:
- air, rail, and bus transportation
- car expenses where travel is done by car
- taxi fares or other costs of transportation between the airport or station and hotel
- lodging costs, and
- the cost of meals.
If unreimbursed by the charity, such expenses are deductible if they are necessarily incurred while the volunteer was away from home performing services for the organization. A volunteer cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. Travel, meals and lodging, and other expenses for a volunteer’s spouse or children are likewise not deductible.
Moreover, the trip must have been mostly for business, not pleasure, or it won’t be deductible at all. The IRS says that a volunteer can claim a charitable contribution deduction for travel expenses only if there is “no significant element of personal pleasure, recreation, or vacation in the travel.” This does not mean that the volunteer can’t enjoy the trip, but he or she must have been on duty in “a genuine and substantial sense” throughout the trip. A volunteer gets no deduction at all if he or she had only nominal duties, or had no duties for significant parts of the trip.
Example: Betty is a troop leader for a tax-exempt youth group and helps take the group on a camping trip. Betty is responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. Betty participated in the activities of the group and enjoyed her time with them. She oversaw the breaking of camp and helped transport the group home. Betty can deduct her travel expenses.
Example: Ben works for several hours each morning on an archeological dig sponsored by a nonprofit organization. The rest of the day he is free for recreation and sightseeing. He cannot take a charitable contribution deduction for his travel expenses even though he worked very hard during those few hours.
A volunteer can deduct unreimbursed expenses incurred in attended a convention related to charity's work. These include transportation expenses and a reasonable amount for meals and lodging, while away from home overnight.
A volunteer can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that must be worn while volunteering for a charity. For example, a person who volunteers as a Red Cross nurse's aide at a hospital can deduct the cost of uniforms he or she must wear.
A volunteer who works with a charity whose purpose is to reduce juvenile delinquency can deduct amounts he or she pays to allow underprivileged youths to attend athletic events, movies, or dinners. The youths must be selected by the charity, not the volunteer. The volunteer may not deduct his or her own expenses incurred in accompanying the young people.
You may deduct the full cost of long distance telephone calls cellphone charges made on behalf of a charity.
If you host a fundraiser, board meeting, or other event for a charity, you can deduct all catering expenses as a charitable deduction.
Substantiation of Volunteer Expenses
The substantiation requirements for deducting unreimbursed volunteer expenses differ according to the amount of the expenses.
Expenses Less than $250
If a volunteer claims a deduction of less than $250, he or she need obtain no substantiation from the charity. But the volunteer should keep records of his or her expenses in case they are ever questioned by the IRS.
Expenses of $250 or More
If the claimed expenses are $250 or more, the volunteer must get an acknowledgment from the charity that contains:
- a description of the services provided
- a statement of whether or not the charity provided you any goods or services to reimburse the volunteer for the expenses incurred
- a description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse the volunteer, or
- a statement that the only benefit the volunteer received was an intangible religious benefit, if that was the case; the acknowledgment does not need to describe or estimate the value of an intangible religious benefit.
The volunteer must get the acknowledgment by the earlier of:
- the date his or her tax return is filed for the year the contribution was made, or
- the due date, including extensions, for filing the return—usually October 15 of the year after the contribution was made.