Taxes probably aren’t the first thing on your mind when you decide to get involved in a worthy cause. But your volunteer ventures could still earn you some welcome deductions.
First, however, make sure that the organization is eligible to receive tax-deductible contributions. As a general rule, churches, synagogues and other religious organizations are eligible, as are nonprofit schools and hospitals. If you’re feeling kindly toward your local, state or federal government, those gifts are generally deductible as well. Charitable behemoths such as the American Red Cross, Goodwill Industries, Salvation Army and United Way enjoy the IRS’s blessing, too. On the other hand, donations don’t rate a tax break if the recipients are political groups or candidates, lobbying organizations, unions, chambers of commerce and homeowners associations, among others.
Checking Out a Charity
If it’s unclear to you whether an organization qualifies, consult the IRS’s online “Exempt Organizations Select Check,” listed under “Tools” at www.irs.gov. It offers a searchable list of eligible organizations, as well as those whose eligibility has been revoked. You can also call the IRS at 877-829-5500 to check a charity’s status.
If you simply give money to the charity of your choosing, the process is relatively straightforward. To claim a deduction, you’ll need to file a Form 1040 when you do your taxes for the year and itemize your deductions on Schedule A.
But what if you actively participate as a volunteer? If that’s the case, you could be entitled to several other deductions, though the rules are strict and a little complicated.
What You Can and Can’t Deduct
Unfortunately, your time itself isn’t deductible, nor is the value of any services you perform. However, your transportation to get there may be. If you use your car on behalf of the charity, you can either deduct your actual gas and oil expenses or simply take the standard charitable mileage deduction of 14 cents per mile.
Other travel, lodging and meal costs can also be deductible, but “only if there is no significant element of personal pleasure, recreation or vacation in the travel,” as the IRS puts it. The agency is quick to clarify that you aren’t forbidden any fun at all, but that you must be “on duty in a genuine and substantial sense throughout the trip.”
To help illustrate the difference, the IRS offers these two examples:
1. “You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. You participate in the activities of the group and enjoy your time with them. You oversee the breaking of camp and you transport the group home.”
2. “You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. The project is sponsored by a charitable organization.”
As you might guess, the travel costs in the first example are deductible, while those in the second one generally aren’t.
Travel to conventions has its own rules, a major one being that you must have been selected to attend as the representative of an eligible organization and aren’t simply going on your own. And, of course, any expenses that are reimbursed by the organization can’t also be claimed as deductions.
Uniforms are also deductible, as long as they can’t do double duty in everyday use. So a hospital volunteer’s candy-striper uniform is mostly likely deductible, while the polo short and khakis you bought for your volunteer work as a museum guide would not be.
The Bottom Line
Those are some of the basic rules, but there are many more where they came from – including special deductions for exchange-student hosts, church deacons and whaling captains – in IRS Publication 526, “Charitable Deductions.” It’s available online at irs.gov.