Volunteering is a great way to contribute your time and skills to a cause close to your heart. Unfortunately, when you donate time and services, you are NOT allowed a deduction for the value of the time and services. It doesn’t matter if the services you provide require significant skills and experience that a charity would need to pay dearly for if it were to obtain the services on its own. You still don’t get to deduct the value of your time.
However, there are some out-of-pocket costs associated with your volunteer work that DO qualify for a charitable deduction.
Here are a few examples:
- Supplies used during the activity – the expense must be unreimbursed, directly connected with the services, and not be personal, living or family expenses.
- Uniforms used during the activity – as long as they aren’t suitable for everyday use and you must wear them for volunteering.
- Transportation costs to and from the activity – either actual costs or using a rate of 14 cents per mile
- Away-from-home travel expenses, plus lodging and meals as long as there isn’t a significant element of personal pleasure associated with the travel
In order to get a charitable deduction:
- You must itemize your deductions. The Tax Cuts and Jobs Act greatly increased the standard deduction available in 2018 and beyond pushing more taxpayer to use the standard deduction instead of itemizing.
- You must donate to an organization that is a qualified charity. You can check if your organization qualifies by using the IRS’s “Tax Exempt Organization Search” tool at https://www.irs.gov/charities-non-profits/tax-exempt-organization-search.
- Keep good records. It’s important to keep good records and receipts to prove the amount of the expenses. If the amount of an expense, considered separately, is $250 or more, you must also get written acknowledgment from the organization.
If you have questions about charitable deductions and volunteer expenses, please contact your Wegner CPAs tax expert.