Volunteers may not get paid, but they may qualify for tax deductions based on their out-of-pocket expenses. However, in order to take those tax deductions, volunteers must itemize their deductions when filing their annual tax return. This means that the standard deduction does not allow volunteers to enjoy a tax break for their money spent.
So if you volunteer and spend money while doing so, here's what you need to know about itemizing your deductions so that you qualify for these savings.
Potential Tax Deductions for Volunteer Work
- Costs of gas and oil or a mileage deduction of 14 cents per mile to and from where you volunteer: However, the mileage must be for getting yourself to the volunteer site. Driving your child to a charitable volunteer event doesn't count. Parking fees and tolls can be deducted as well. Routine upkeep and maintenance costs are not deductibles nor any share of your car’s insurance.
- Round trip public transportation costs: This includes subway, bus, or taxi fare from work or home to the place where volunteering takes place. This can become a bit complicated should you take the bus home from work, but stop off to volunteer. You'll have to isolate the part of your fees or fare that involve your volunteer work.
- Long-distance transportation, lodging, and meal expenses: Are you going to a board meeting in another city or state? Or representing your charity at a conference? You may be able to deduct airfare or other transportation costs plus hotel expenses and meals if directly connected to your volunteer work.
- Out-of-pocket expenses: You might not think of deducting small expenses such as the copying you did to get ready for a board meeting, those personal hygiene items the homeless shelter asked you to bring with you, or the glue, paper, and scissors you furnished for your Sunday school class. But keep the receipts. You may be able to deduct those expenses.
- Uniforms: Does the charity you volunteer for ask you to buy a particular outfit to wear when you’re volunteering? That red polo with the logo you got for the golf tournament probably won’t count since you can wear it for other things, but how about that hospital tunic you needed or the outfit with the special ranger hat that the zoo asked you to buy and wear? Those might be deductible expenses.
How to Qualify for These Tax Deductions
In order to enjoy these tax deductions and savings, you'll need to volunteer for an IRS qualified charity. Such organizations have applied for and received a tax-exempt designation from the IRS.
Next, you'll need to itemize your deductions on your tax form. If you take the standard deduction, you won’t be able to deduct volunteer expenses. If you’re already itemizing things such as charitable donations and medical expenses, you can probably deduct volunteer expenses as well.
However, you can't deduct expenses for which the charity reimbursed you. That’s considered double-dipping, so don't do it.
Only itemize those expenses directly connected to the work you did as a volunteer and incurred because of it. For instance, if you were going on a vacation, but stopped in to do a few hours of volunteer work during that holiday, you can’t deduct your travel expenses. If on the other hand, you travel somewhere specifically to do volunteer work, you may be able to deduct those travel expenses.
Don’t try to claim personal expenditures as volunteer expenses, either. For instance, let's say you take your child along to your volunteer work and end up buying him lunch. The lunch is not deductible since it is a personal choice, not one mandated by the volunteer work you’re doing. Likewise, childcare expenses are not deductible.
Keep good written records of expenses related to your volunteer work. Start a mileage log and keep it up to date. Keep all your receipts.
You also can't take a tax deduction for your time. That’s the volunteer part!
For more detailed information about deducting volunteer expenses during tax season, check out IRS Publication 526.