Volunteering & Tax Deductions

Most of us find ourselves volunteering at some point in our lives and the reasons are numerous.  Volunteering looks great on a college or work resume. If you have interests, causes, or hobbies that you believe strongly in, volunteering in those fields is a great way to give back to the community.  Volunteering just feels good! But can you receive tax benefits in the form of credits or deductions for the time you spend volunteering? Is volunteer time tax deductible? The short answer is no. Providing free professional services to a qualifying nonprofit cannot be claimed as a tax deduction.  The IRS lists volunteer time as a contribution you cannot deduct for in their Publication 526: Charitable Contributions document.  

So what is the good news?  While you can’t claim your time, you can deduct for out of pocket expenses incurred as a part of volunteer such as uniforms and transportation.  Transportation can include travel expenses such as lodging and meals, provided the trip is primarily for volunteering and not leisure. If you use your own vehicle for volunteer work, gas and oil costs are reimbursable.  Gas can be reimbursed at the rate of $0.14 per mile and tolls and parking costs are deductible as well. Entertaining potential contributors to your charity through events such as fundraiser are also deductible expenses.

To claim any deductions, please remember – you WILL need documentation of the unreimbursed expenses for expenses totaling more than $250.  Documentation required includes a list of expenses with receipts and a letter from the charity explaining the work done. Acceptable expenses are also listed in Publication 526.  You cannot have received reimbursement from the charity for these expenses in order to claim. Additionally, the expenses accrued must be solely the result of volunteering and not due to any personal interest or benefit.

To receive tax deductions, the organization that you are volunteering for must be a qualified nonprofit, tax-exempt organization.  Not sure? There are several ways to verify status. You can ask the charity for a copy of their 501(c)(3) letters. The IRS Publication 78 contains a list of qualified organizations at irs.gov or by calling 877-829-5500.

Take the time to claim the deductions due to you through volunteer work.  As you assist charities by supplying your time and skills, the IRS assists taxpayers by making it more feasible to volunteer through tax deductions.  Some volunteers look at the money saved through taxes as more that they can contribute to the causes that they believe in!