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Contributions to charity have long been a regular item in the family budget for a great number of taxpayers, but some of you may go even a little farther than that … literally.
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If you decide to spend the summer time vacation donating your services to charity, you should know that most of your out-of-pocket expenses during your volunteer work are deductible on your tax returns.
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The first important thing to know about charitable contributions, no matter their nature, is that they must be on behalf of a qualified organization. To make sure this is the case, use the IRS Select Check Tool that allows you to search for and select an exempt organization and check certain information about its federal tax status and filings. If a group is not a qualified charity, that doesn’t mean it’s not a worthwhile program, but it does mean your unreimbursed expenses will not be deductible. |
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The second important fact to remember is that the value of your time and services given to charity is not deductible, only some of the expenses incurred while performing these services. All of your out-of-pocket expenses paid for these services must be:
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- expenses you had only because of the services you gave, and
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- not personal, living or family expenses.
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Charitable services may imply traveling, in which case you can claim a charitable contribution deduction for travel expenses.
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| Deductible travel expenses may include: |
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- air, rail and bus transportation,
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- taxi or other transportation costs between the airport or station and your hotel.
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| Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses. |
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| Travel expenses must be necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. |
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| The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. |
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| You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. |
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| If you drive your own car, you can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. |
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If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution.
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| You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. |
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| If a qualified organization selects you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight for the convention. |
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| You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. |
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If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. You may be able to deduct any necessary travel expenses that are more than the allowance.
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You can also deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization.
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If your charitable contribution travels to you, such as foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period, you may be able to deduct the cost of books, tuition, food, clothing, transportation, medical and dental care, entertainment, and other amounts you actually spend for the well-being of the student.
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You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country.
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As with all deductible expenses, remember to hang on to those receipts as you travel to ensure you claim all of your allowable deductions.
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| There are, of course, numerous other circumstances and IRS regulations to match each one of them. To see them all, you can check the IRS Publication 526, Charitable Contributions. |
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| To save your time for better (maybe even charitable) use and help you navigate through all the IRS rules and regulations, help from a tax professional is always the best option. |
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