The tax deductions that are available to volunteers won’t add up to a huge dollar amount, as there aren’t actually any deductions for the hours that they put in. Even as a highly skilled individual that is volunteering their time, such as a lawyer or graphic designer, is unable to deduct the value of their time. That being said, volunteers can still receive a dollar return for various expenses that they must pay for under the name of the non-profit they are working with. Keep in mind that the IRS recognizes volunteer’s role in society as an important one, and does give them some significant tax deductions. Here are a few things that the IRS allows volunteers working at non-profit organizations to deduct out of their taxable income.
Transportation and Car Expenses
Volunteers are able to deduct their transportation and car expenses that they acquire as they travel back and forth from their home to meetings, the office or other sites for reasons such as in order to help a patient or attend a special event. Those volunteers who drive can pick between deducting their oil and gas used to travel or can deduct for their mileage at a 14 cent per mile rate. Due to the high expense of gas in this day and age, the majority of volunteers will benefit more from keeping track of their driving expenses. You may also deduct parking tolls and fees incurred while working as a volunteer. Unfortunately, volunteers are unable to deduct any general car repairs or maintenance expenses, registration fees, depreciation or the cost of insurance or tires. If you are taking public transportation then you can deduct bus, taxi or subway fare on your taxes.
Volunteers are able to deduct any travel expenses that they incur. This includes airfare and other such transportation, as well as meals and accommodations while they are volunteering away from their home. This can include trips that needed to be taken in order to attend a board meeting or convention. However, keep in mind that there are some major limitations to deducting travel expenses. For instance, volunteers are unable to gain a significant amount of personal pleasure from any trips taken while still deducting it on their taxes. This means that trips cannot in anyway be for recreation or any type of vacation. Volunteers must actually really be working; this means they can’t just tag along for a few outings while doing a couple of duties or even no duties while on the trip. They must be doing a large amount of work to be able to deduct the expenses of the trip from their taxes.
Other Expenses That are Out-of-Pocket
Volunteers are able to deduct other types of expenses that they gain during the course of volunteering. For instance, as a board member, volunteers can deduct un-reimbursed postage, phones and copying charges that were incurred from preparing for such meetings. Another example is a volunteer at an animal shelter who can deduct any treats that they bought for the animals in order to train them on walks for instance.
If volunteers have to buy a uniform as part of their position, for instance an apron that identifies them as a volunteer at a hospital, then they are able to deduct both the price of the uniform and the cost of its upkeep. One limitation to this is that the uniform cannot be suitable for everyday wear, and so a simple T-shirt with a logo or being required to wear all black will not allow a tax deduction on the clothing. Additionally, the organization must require that volunteers wear their uniforms in order to perform services, and not just for special events.
Parties and Events
Any expenses of parties or events that are thrown in the name of the non-profit organization can be deducted from taxes. However, the party or event must be strictly in the name of the non-profit, and so cannot be a party under your name in order to raise money for a cause, as this will not fly with the IRS. However, under the non-profit organization such expenses as food, decoration and facilities that you purchased can be written off.
Documentation is Important
As with any type of deduction, whether it’s charitable or not, it is crucial that proper documentation takes place. It’s recommended that a log be kept that shows the direct connection between volunteer work and the expenses incurred. It’s also a good idea to keep track of receipts, as well as any canceled checks in order to back up your deduction.
Limitations on Deductions
There are a few additional limitations that you should be aware of when deducting volunteer work on taxes. For one, the organization must be an IRS-recognized, qualified charity. Volunteers must also itemize their deduction on tax returns, and those who are filling out a 1040EZ will not be able to gain any tax benefit. Additionally, volunteers are not able to claim expenses that the non-profit organization has already reimbursed them for. Expenses must also be related directly to the work of the volunteer and only be gained due to that specific work. This means that the expenses cannot be of a personal nature, and can’t be for living items, for family or for activities like a meal for a child who is accompanying the volunteer to a board meeting.