How volunteering can save you money on next year’s taxes
Most people know that making a financial donation to a qualified 501(c)(3) nonprofit can earn you a tax deduction. But did you know that volunteering with one may qualify you for tax deductions as well?
Below, we’ve laid out four expenses that volunteers may be able to deduct. We encourage you to speak to your personal tax advisor now to plan ahead and maximize your deductions for 2017.
What Is Deductible and What Isn’t
As much as we value your time as a volunteer, the IRS does not see it as a tax-deduction.
According to the 2016 IRS publication on Charitable Contributions: “Although you can’t deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization.”
The amounts you deduct must be unreimbursed; directly connected with the services; expenses you had only because of the services you gave; and not personal, living or family expenses.
Here are four qualifying deductions for volunteers. Keep them in mind as you volunteer this year.
- Car and Transportation Costs: This one is pretty straight forward. If you drive to and from a volunteer opportunity, you can deduct the costs of gas and oil that are directly related to getting there and back. If you don’t want to figure your actual costs, you can deduct a standard 14 cents per mile (2016 rate).
- Travel Expenses: If you travel on behalf of an organization for the sole purpose of performing a volunteer service, this may apply to you. You can generally deduct travel expenses including airfare, car rental, lodging, meals, and transportation costs. This one has some addition IRS guidelines you’ll want to make sure you or your tax advisor are familiar with before claiming the deduction.
- Out-of-pocket Expenses: Let’s say you organize a group to paint a qualified organization’s office, and you purchase the needed supplies like brushes, rollers, painter’s tape, and paint. You can deduct out-of-pocket expenses for any supplies directly related to the volunteer work, as long as the nonprofit does not reimburse you.
- Uniforms: Less frequently, a volunteer opportunity will require you to purchase and wear a uniform. You can deduct the cost and upkeep of uniforms that aren’t suitable for everyday use and that you must wear while performing donated services.
Sign Up to Volunteer
Ready to rack up some deductions? Sign up today to volunteer with your local Salvation Army.
Disclaimer: This information should not be considered professional tax or legal advice and may not pertain to all volunteers. Please contact your personal tax advisor to learn if you qualify.