Charity Volunteers: Step Forward and Claim Your Tax Deductions!

Do you have clients who are dedicated to working on behalf of a charity? Although they may go out of their way to support their favorite cause, they may not be getting a tax deduction for the blood, sweat and tears they expend. The value of personal services, including any wages lost as a result, are nondeductible. On the other hand, taxpayers are able to write off out-of-pocket expenses incurred while performing charitable duties, if they aren’t reimbursed for those costs.

What sort of expenses are we talking about? It can range from smaller items like cake ingredients for a church bake sale or postage for a fundraising mailer to larger costs such as lumber and hardware for building projects. There’s no dollar limit on the expenditures although the other rules for charitable deductions still apply.

Keeping that in mind, here is a partial list of expenses that are commonly deducted by charitable volunteers.

Travel expenses: Generally, you can claim a charitable contribution deduction for travel expenses incurred while you are away from home performing services for a charitable organization, as long as there is no significant element of personal pleasure, recreation or vacation in the travel. This includes:

Air, rail and bus transportation;
Out-of-pocket expenses for your vehicle;
Taxi fares or other transportation costs between the airport or station and your hotel;
Lodging costs; and
The cost of meals.

Because these travel expenses are not business-related, they aren’t subject to the same limits as business expenses.

If you’re taking a deduction for the costs of using your own vehicle, you may deduct your recorded expenses attributable to charitable driving or opt for an IRS-approved flat rate. The flat rate for 2015 is 14 cents per mile. (It hasn’t been adjusted in years.)

Conventions: If a charity chooses you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel — including reasonable amounts for meals and lodging — while you’re away from home overnight for the convention. (See rules for travel expenses above.)

Telephone expenses: Long-distance telephone call, fax transmission and cell phone charges made for a charity are fully deductible. You may also deduct the cost of installing a separate landline in your home for calls on behalf of a charity.

Entertainment: If you host a fundraising dinner or party at your home, all of your out-of-pocket expenses are deductible. As with travel expenses, the usual 50% limit on entertainment and meal expenses doesn’t apply to these charitable functions.

Uniforms: You can 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 like the Boy Scouts or Girl Scouts.

Exchange students: If you house a foreign exchange student, you may deduct up to $50 per month of your expenses for each month the child attends high school. The student must be living in your home under a written agreement with a qualified charity and can’t be a relative.

Foster parents: You may be able to deduct certain expenses of being a foster care provider if you have no profit motive and you’re not, in fact, making a profit.

Underprivileged youths: You may deduct reasonable unreimbursed expenses paid to allow underprivileged youths to attend athletic events, movies or dinners if the youths are selected by a charitable organization with the goal of reducing juvenile delinquency. But your own expenses in accompanying the youths are nondeductible

As usual, detailed recordkeeping is essential. For expenses of $250 or more, you must obtain a written acknowledgment from the charity containing a description of the services provided; a statement of whether or not the charity provided any goods or services in exchange; a description and a good faith estimate of the value of any goods or services received; and a statement if you’re claiming you’re only receiving an intangible religious benefit.

Income Tax