Minimize Your Tax Bill by Volunteering for Charity
If you do volunteer work for a charitable organization and have not kept track of your out-of-pocket expenses, you might be passing up an excellent opportunity to lower your tax bill.
To qualify, your expenses must relate directly to the charity, and you must itemize those deductions on your tax return. Here is a brief rundown of what to keep in mind:
Non-reimbursed out-of-pocket expenses are deductible: Volunteers may deduct the cost of postage stamps, supplies and other out-of-pocket costs incurred in their volunteer work. For volunteers who are required to wear a uniform, the cost of buying uniforms is deductible if they are unsuitable for everyday wear.
Time volunteered is not deductible: The cost of your time, no matter how valuable it may be, is not deductible. This is true even if you would normally be paid for the service you contribute. For example, accountants who provide free consulting to nonprofits can't deduct the amount they would normally charge for their services for those hours.
Using your car for volunteer work may earn you a deduction: The standard mileage rate for volunteers who use their own cars is 14 cents per mile. Alternatively, you may deduct your actual un-reimbursed expenses for gas and oil, but not maintenance, depreciation or insurance. With either method, parking fees and tolls are deductible as well.
Overnight travel for charitable work can be deductible: If you travel overnight for charitable purposes, your expenses are deductible as long as they are reasonable in amount and not connected with personal activities or any element of recreation.
Special rules apply to conventions: Travel and other out-of-pocket expenses related to attendance at a convention for volunteers are deductible only if you have been chosen as a delegate to represent the organization.
Finally, just remember that it is up to you, the volunteer, to substantiate your deductions. If you take these deductions, you should be prepared to show the IRS the connection between the costs claimed and the charitable work performed. Always keep accurate records!