As a volunteer of a 501(c)(3) tax-exempt organization, you can take advantage of tax breaks to save on your tax bill. While you can't deduct the value of your time or services (such as legal or medical services, that you would normally bill for) or the value of income lost while you work as an unpaid volunteer, you can deduct unreimbursed out-of-pocket costs incurred while volunteering.
Deductible costs include:
- Travel - You can deduct travel expenses incurred while performing services for a charity (including out-of-pocket round-trip travel costs, transportation costs, lodging, and meals). Keep in mind that if your services for the charity involve lobbying activities, or your travel consists of a significant level of personal recreation or vacation, then these expenses aren't deductible. You also can't deduct travel, meal, or lodging expenses for your spouse or children.
- Car Expenses - If you use your own car to perform services for a charitable organization, you can deduct a flat rate of $0.14 per mile, or deduct your actual cost for gas and oil. You can also deduct parking fees and tolls. If you claim car expenses, you must keep reliable written records of your expenses (regular written records made at or near the time of your expenses). Your records should show the name of the organization you were serving, and the dates you used your car. If you are deducting the standard mileage rate, your records must show the miles you drove your car for charitable purposes. If you deduct your actual cost of gas and oil, your records must show the costs of operating the car that are directly related to your volunteer work.
- Uniforms - Volunteers can deduct the cost of buying a uniform if the uniform must be worn when volunteering, and is not suitable for everyday use.
If your volunteer expenses are less than $250, you don't need an acknowledgment from the charity, but you should keep detailed records of your expenses in case you are ever questioned by the IRS. If your claimed expenses are $250 or more, you'll need to get official documentation directly from the charity. This written document should contain a description of the volunteering activity and the services provided, a statement of whether or not the charity provided you with any goods or services as a reimbursement, and a detailed listing of the out-of-pocket costs you incurred. If you have questions about your volunteer deductions, we can help—contact us today.