Volunteering and Tax Laws
NOTE: With the new tax legislation, these rules may change. They will be updated for 2018.
Occasionally, the question of volunteer time and tax deductions comes up. Here's the explanation of what can be deducted from the U.S. Treasury:
Question: There is much talk about encouraging people to volunteer their time to help organizations that provide community services. Shouldn't people who do volunteer work be provided with a tax deduction to compensate them for their donation?
Answer: Under current law, volunteers are prohibited from taking a charitable contribution deduction for the value of the services they provided to charities. However, the tax code does support volunteer work for charitable organizations by allowing volunteers to take a charitable contribution deduction for expenses they incur in connection with their volunteer services, but the expenses must be ones the charity would otherwise have to incur, not personal expenses of the volunteer. For example, volunteers may deduct the cost of materials they donate for use in repairs to a church, supplies they use in leading activities at a day care center, or uniforms they wear when serving as nurses' aides. However, volunteers may not deduct personal expenses such as meals eaten during a break in a local service project, transportation to and from a school where they donate their time, or child care expenses. For a list of what you can't deduct, see the section Contributions You Can't Deduct of IRS Publication 526.
Question: Can I deduct mileage between my home and the Footlighters?
Answer: Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. If you don't
want to figure your actual costs, you can deduct 14 cents for each mile. This amount is set by statute and rarely changes. Note that this is much less than the standard mileage deduction for business travel.
Keep a record of the billable expenses you incur for the organization. Send a receipt to the organization and keep a copy for your own tax records. Ask your accountant or IRS representative what percentage of your services can be deducted and if there is a limit. Depending upon the organization, you can deduct anywhere from 30 to 50 percent of your donation. Keep all your receipts in case you are called for an audit.
Occasionally, the question of volunteer time and tax deductions comes up. Here's the explanation of what can be deducted from the U.S. Treasury:
Question: There is much talk about encouraging people to volunteer their time to help organizations that provide community services. Shouldn't people who do volunteer work be provided with a tax deduction to compensate them for their donation?
Answer: Under current law, volunteers are prohibited from taking a charitable contribution deduction for the value of the services they provided to charities. However, the tax code does support volunteer work for charitable organizations by allowing volunteers to take a charitable contribution deduction for expenses they incur in connection with their volunteer services, but the expenses must be ones the charity would otherwise have to incur, not personal expenses of the volunteer. For example, volunteers may deduct the cost of materials they donate for use in repairs to a church, supplies they use in leading activities at a day care center, or uniforms they wear when serving as nurses' aides. However, volunteers may not deduct personal expenses such as meals eaten during a break in a local service project, transportation to and from a school where they donate their time, or child care expenses. For a list of what you can't deduct, see the section Contributions You Can't Deduct of IRS Publication 526.
Question: Can I deduct mileage between my home and the Footlighters?
Answer: Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. If you don't
want to figure your actual costs, you can deduct 14 cents for each mile. This amount is set by statute and rarely changes. Note that this is much less than the standard mileage deduction for business travel.
Keep a record of the billable expenses you incur for the organization. Send a receipt to the organization and keep a copy for your own tax records. Ask your accountant or IRS representative what percentage of your services can be deducted and if there is a limit. Depending upon the organization, you can deduct anywhere from 30 to 50 percent of your donation. Keep all your receipts in case you are called for an audit.