Tax Strategies & Credits

Tips on Getting Holiday Volunteer Work Tax Breaks

Tips on Getting Holiday Volunteer Work Tax Breaks

Volunteering is one of the most fulfilling and meaningful activities that you can engage in, particularly around the holidays. Whether you choose to contribute your time to a local organization or an international one, giving of yourself makes a real difference, both for those who receive the benefit and for your own sense of wellbeing. It also can provide you with an additional tax advantage.

In many cases, participating in a charity involves spending money out of your own pocket, and when that is the case there is a good chance that you will be able to claim a tax deduction for those expenses. This is true no matter where the organization is located, but you have to make sure that you are following the IRS rules regarding charity work. Take the time to familiarize yourself with these five guidelines, as they address the most common issues when it comes to tax deductions for charity work:

  • You're not allowed to deduct the value of your time. Even if you are an attorney providing legal services to the charity of your choice, you are not allowed to deduct the billable hours that you donate on your tax return. The expenses that are permitted to be deducted include monetary expenses - money that you pay out of pocket for things like supplies, meals, uniforms and the like. As long as the charity is not reimbursing you for what you spend on those items, you are free to deduct their value on your taxes. But the time that you spend doing volunteer work - no matter what it would be valued at for another entity - is not deductible. Additionally, any expenses that you deduct must be associated to the service that you are providing - they cannot be personal expenses.
  • The organization must have qualified tax-exempt status. Though most public charities, including churches and non-profit groups - do have tax-exempt status, it is a good idea to check to make sure that the organization that you're working for does before trying to take a tax deduction for contributions that you make. You can ask the organization for a copy of their letter from the IRS that confirms their tax status - most organizations have them readily available. If not, you can always look it up on the IRS website: Tax exempt organizations are listed in the Exempt Organizations Database.
  • The expenses that you deduct must be for expenses involving your own work. According to the IRS rules, in order to qualify for a tax deduction for charity expenses, the money spent must have been for your own work rather than for somebody else. This means that if your child decides to fly to a foreign country to render aid to earthquake or flood victims and you pay for their plane fare, you may not deduct that expense - even though it contributed to the charitable work.
  • If you travel to do volunteer work, you can deduct your travel expenses. If you decide to travel to do charity work - whether within your own town or to a foreign country - you are entitled to deduct the costs of your travel as long as the main purpose of the trip was to do the work. If you are driving to the supermarket and decide to drop off clothing at your local Goodwill office, you can not deduct the cost of your gas, but if you use a personal vehicle to get there and back and that is the only reason that you set out, then the cost of your gas and automotive expenses is deductible at the IRS charitable standard mileage rate. The cost of maintenance, insurance and depreciation cannot be taken as a deduction. Airfare, ground transportation, parking, meals, tolls, and lodging are all tax-deductible expenses if they are incurred as part of your charitable efforts.
  • Tax deductions for charitable expenses must be itemized. Though expenses incurred while doing charitable work are deductible, they must be itemized on your Schedule A (Form 1040) in order to get the tax benefit.

The tax benefits offered by these deductions generally don't add up to a tremendous amount of money, but it is worth knowing about them. The greatest benefit of doing charitable work is in the good that you do and the happiness that you get from helping others. If you have any questions about what expenses you are or are not permitted to deduct, contact Gordon McNamee CPA, or review IRS Publication 526, titled Charitable Contributions.

share this post
Search for matches...
Gordon W. McNamee

Gordon W. McNamee

Gordon W. McNamee is a Certified Public Accountant (CPA) based in Rancho Cucamonga, CA. Gordon W. McNamee can assist you with your tax return preparation, payroll, accounting and tax planning needs. <br /> <br /> 2021 is Gordon W. McNamee, CPAs 38th year in the profession. As as a former IRS agent (1984 through 1987), Gordon has been in public accounting since 1987. Gordon specializes in individual, corporate, HOA, trust, estate and payroll taxes. He also prepares financial statements and provides accounting & bookkeeping services. He enjoys making his clients feel at ease while providing a personalized professional service.

GORDON W. MCNAMEE, CPA
22 reviews

California

Recommended Professionals

In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.

Join 60,000 who get our weekly newsletter. No spam.

We know tax and accounting issues are complicated.

Do you have additional questions on this topic for this author?

Related Posts

Latest Posts