What you can deduct when volunteering
While many charitable donations qualify as deductions on your taxes, your time spent volunteering is not one of them. However, other expenses like volunteer supplies or transportation may qualify. 415 Group Senior Associate Mikaela Ferguson explains the ins and outs of charitable tax benefits.
A lot of our clients are very charitable. While many certainly donate gifts like cash or material goods, some donate their time through volunteer work. However, it’s a common misconception that time spent volunteering is deductible, and I often receive questions from clients about those write offs. While your volunteer time is not a deductible item, there are associated expenses that may qualify for deduction for those taxpayers who itemize.
Those qualifying expenses must be incurred directly by the individual and related expressly to the volunteer work. Many people don’t associate these costs as something that could be deducted, like paint supplies, work pants or other clothing needed for volunteer work. Other qualifying expenses would be transportation costs for the volunteer. Specifically, we’re talking about mileage and travel expenses. The biggest test the items must pass to be considered deductible is that they are not used in any other fashion by the individual. For example, paint supplies shouldn’t be then used to paint your own house.
Travel expense deductions may apply to both in-town and out-of-town volunteer activities. I haven’t seen many clients use this deduction, but if you itemize and have significant volunteer activity, the $0.14 per mile deduction can really add up.
Perhaps, the most important way to comply with these tax regulations is by keeping good records of your time and expenses, in case your deductions raise questions.
At 415 Group, we ask the right questions to make sure you’re getting credit for the proper deductions. We also look at your total tax situation to see where you’ll get the most benefit.
