Tax Services • Published 7/23/2019 Demystifying Charitable Deductions for Volunteering

One of the most widely-known and widely-used tax deductions is the charitable contribution deduction. Specifically, the IRS allows a deduction for contributions made to qualifying charitable organizations. The contributions generally take the form of cash gifts or donations of goods to an organization.

Volunteering for your favorite charity may not only be personally satisfying, but may also provide tax benefits as result of your work.

What taxpayers may not know, however, is that volunteering for your favorite charitable organization can also generate tax deductions. Although the Internal Revenue Code does not allow a deduction for time spent volunteering, some costs associated with volunteer work may qualify for the charitable contribution deduction. This article will highlight the types of volunteer-related expenses eligible for a charitable deduction.

First, in order for any expenses incurred as a volunteer to qualify for the charitable contribution deduction, the taxpayer must have engaged in volunteer work for a qualified charitable organization. Qualifying organizations include organizations that are organized for religious, charitable, educational, scientific, or literary purposes. If the volunteer work is conducted for a qualifying organization, then the IRS allows a deduction for out-of-pocket expenses incurred while volunteering for the organization. Some common examples of out-of-pocket costs eligible for deduction include:

1. Automobile expenses: Taxpayers can deduct actual expenses such as the cost of gas used in their volunteer work or they can deduct a per mile amount using the IRS standard mileage rate for charitable organizations. The 2019 rate is $.14 per mile during charitable use. Regardless of method, taxpayers must be sure to keep a log of the charitable miles.
2. Travel expenses: Taxpayers can deduct certain travel expenses paid while performing services for a qualifying charitable organization. This includes the costs of travel, lodging, meals, taxis, and other transportation directly related to the volunteering purpose. If there is a significant personal pleasure component to the travel, however, the charitable deduction will be disallowed.
3. Uniform expenses: The cost of a uniform can be claimed as a charitable deduction as long as the uniform has no general use outside the work being performed. Some common uniforms that meet the requirements are medical scrubs and protective jumpsuits that are necessary to perform the services. The costs of cleaning these items also qualifies for a charitable deduction.
4. Incidental expenses: Incidental out-of-pocket expenses that qualify for a charitable deduction include money spent on postage, supplies, advertising and other items related to your volunteer work.

As with any deduction, it is important for taxpayers to keep records for expenses related to the charitable work. Importantly, a gift of over $250 will require a statement from the organization describing the nature of volunteering activity and a listing of all out-of-pocket expenses claimed as a deduction.

Volunteering for your favorite charity may not only be personally satisfying, but may also provide tax benefits as result of your work. If you personally paid for an expense directly related to volunteer work, it may qualify for a charitable deduction. If you have any specific questions regarding the deductibility of expenses related to volunteer work or any other questions, your P&N tax advisor will be happy to help.

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