September 03, 2012
Deductible Out of Pocket Expenses of Charitable Volunteers
Charitable tax deductions are not allowed for the contribution of services or time to a charity. However, a charitable deduction is allowed for unreimbursed expenses incurred while performing volunteer services to a charitable organization.
In order for such expenses to qualify as a charitable deduction, these expenses must meet certain criteria which include:
- The expenses must be unreimbursed,
- Directly connected with services to a qualified charitable organization,
- Expenses incurred by the volunteer only because of the services performed, and
- The expenses cannot be considered personal, living or family expenses.
Some of the allowable deducible out of pocket expenses include unreimbursed expenses for transportation costs (mileage, parking, tolls, airfare, etc.), meals and lodging, supplies, and uniforms or clothing required to be worn while performing services to a charitable organization.
Automobile expenses can be computed by using actual expenses or a standard mileage rate of 14 cents per mile. Parking fees and tolls may be deducted, whether the actual expenses or the standards mileage rate is utilized to compute other costs. Gas and oil costs that are directly related to the charity services area also allowable expenses. However, depreciation, general repairs and maintenance, registration fees, and automobile insurance costs are not allowable expenditures for this deduction.
Volunteers can claim a charitable contribution deduction for travel expenses, such as airfare, meals and lodging, incurred while away from home if there is no significant element of personal pleasure, recreation, or vacation in the travel. Because charitable travel expenses are non business related, they are not subject to the 50% limit on entertainment and meals.
Volunteers can deduct the cost and upkeep of uniforms that are not suitable for everyday use that are required to be worn while performing donated services. For example, scout leaders can deduct the cost of uniforms (and cleaning) that are worn when performing donated services provided the uniforms are not suitable for everyday wear.
Volunteers who spend time with underprivileged children can deduct unreimbursed expenses, such as various admission costs and meal costs, actually spent for the youngster. They may not, however, deduct the portion of the expense attributable for themselves.
Volunteers also cannot deduct the cost of child care for the volunteer’s own children while the volunteer performs services for a charitable organization.
If a volunteer claims $ 250 or more in out of pocket expenses from a single charity activity, the volunteer must have a receipt from the charity verifying the services rendered and the type of expense incurred by the volunteer to substantiate the deduction. The expenses are deductible by the volunteer as long as the volunteer maintains detailed records of the expenses and obtains the appropriate receipts in instances where the amount exceeds $ 250.
If you volunteer your time and would like to further discuss possible additional charity deductions, please contact your Marcum Tax Professional.