Volunteering is a great job. It makes you feel great that your efforts could spread a little ‘good’ in the world around you. While helping others is certainly laudable, volunteers often have to go out of their way and spend money from their own pockets to provide aid and assistance to other people. However, just because you choose to volunteer at events and jobs that don’t pay, doesn’t mean you aren’t entitled to tax deductions on your out-of-pocket spending.
Let’s guide you with the expenses that you may be able to deduct and those that you can’t.
1. Costs of oil and gas – If a volunteer uses his/her own car to perform charity/volunteer services, he/she can deduct the costs of gas or oil. Volunteers can opt for a mileage deduction of 14 cents/mile. Apart from this, parking fees and toll tickets are also eligible for deduction.
Exception: You cannot include upkeep and maintenance costs of your vehicle in the deductions.
2. Away-from-home travel expenses – If volunteers are required to travel to a different city or state for volunteer services, they can deduct out-of-pocket costs such as round-trip travel cost, taxi fares, meals, and any other costs of transportation between the place of stay and the volunteering site.
Exception: If a significant portion of your travel is inclined towards your personal pleasure or if the volunteer work involves any kind of lobbying activities, you cannot deduct the expenses incurred during such a trip.
3. Costs associated with uniforms – Many charitable and volunteer services require volunteers to wear a specific uniform. Since those uniforms serve no general purpose later, volunteers can deduct the costs of uniforms.
4. Stationery – Small expenses incurred on stationery items like paper, glue, pencils, scissors, personal hygiene items, and other such items that you buy for distributing in shelters or among homeless people, can be deducted.
5. Other costs – Volunteers who host events and gatherings for people on behalf of charitable organizations can deduct the cost of entertaining guests.
Exception: Volunteers cannot deduct the expenses incurred for their personal entertainment or meals.
An important point to note here is that according to the IRS if no transfer of cash or any asset takes place between the donors and the charity, it does not qualify for tax deduction.
How To Apply For Deductions?
Here are a few things to follow when applying for deductions:
- Volunteer for any charitable organization that is recognized by the IRS or any 501(C) (3) organization. These organizations usually are tax-exempted. You can check out the charity’s tax-letter or look it up on the IRS website.
- Instead of opting for the standard deduction, you should itemize the deductions on your tax form itself. The standard deduction doesn’t allow you to deduct volunteering related expenses.
- To keep track of all your volunteering related expenses, maintain a diary or a log and continue to update it with the costs you incur as and when you perform volunteer services. Always keep all your expense receipts. It not only keeps things organized for you but also helps you to know what exactly you can deduct.
For a more detailed explanation, you can check out Publication 526 of the IRS, or you can reach out to MyTaxFiler anytime! Write to us at firstname.lastname@example.org or call us at 1-888-482-0279 and we promise to be there for you!