This time of year our thoughts turn to giving– to friends, family and to charity. And it is also the time of year that we begin to think about – taxes. If you volunteer your time to help a charity during the year, you may be wondering how your volunteer work affects your taxes.
Though the time you give to a charity is priceless, the value of your time is not tax deductible on your tax return. That may not seem fair, but it is the law – you can deduct money or property you give to a charity, but not your time. But here’s some good news – you can get a tax deduction for expenses you pay in connection with your volunteer work.
Here are a few of the expenses you can deduct:
Travel. If you use your car for charitable work, you can deduct the actual expenses you incur for driving, or a standard mileage rate of 14 cents per mile. Other travel expenses, such as parking, air, bus or train fare, and meals and lodging while away from home are also deductible as itemized deductions. Keep a log of the miles you travel for volunteer work and keep receipts for all the other travel expenses you incur.
Supplies. If you pay for postage to mail charitable requests, buy a Santa suit to entertain at a charitable event, or buy classroom supplies and refreshments for the church Sunday School where you teach, your expenses are tax deductible on your tax return. Any supplies you pay for that are used for the charity are deductible, if you maintain proper receipts or other documentations.
Uniforms. If your charity work requires that you wear a uniform, the costs of purchasing and maintaining your uniforms are tax deductible. This rule applies to actual uniforms, not to business attire that you must wear instead of your usual sweatshirt and jeans.
Parties. If you host a party or a fundraiser for a charity, your expenses of throwing the event are tax deductible, even if you have enjoyed yourself at the event. In other words, there’s a triple benefit — you help the charity, you garner a tax deduction, and you have a great time. Can’t ask for better than that!
In order for you to deduct any of these expenses, the charity must be a qualified charitable organization that is tax exempt under Section 501(c)(3) of the Internal Revenue Code. Most public charities are qualified organizations, but if you have any doubt, you can review a list of qualified charities you’ll find at the IRS website, or find out by calling the IRS Tax Exempt Customer Services section at 877-829-5500.
Don’t worry about knowing what acts of kindness are tax deductible. TurboTax will ask you simple questions and give you the tax deductions you are eligible for based on your answers.