If you itemize your deductions for tax purposes, you should be deducting volunteer expenses. While a charitable deduction is not allowed for contribution of services, out-of-pocket expenses made in rendering gratuitous services to a charitable organization, may be deductible under Reg 1.170A-1(g). Under an old Revenue Ruling (84-61), these expenditures are treated as direct payments to the charity. Before you start collecting those receipts, be advised that the expenditure must be nonpersonal and directly connect with rendering your service.
Examples of unreimbursed expenses include uniforms, equipment, print and copy charges, office supplies, postage, transportation and other travel expenditures, including meals (subject to the 50%) and lodging while rendering services for the charitable organization. Meals & lodging are only deductible if there is no significant personal pleasure, recreation, or vacation in the travel.
The following are examples of possible items you could be deducting as volunteer expenses:
- Mileage to the local airport
- Meals (subject to 50%)
- Lodging, if required, due to a multi-day travel itinerary (as long as you are not vacationing during the stay)
- Cost of Travel; Airline ticket, rental car, bus, etc.
- Any payment to the nonprofit organization for hosting expenditures
- Purchase of supplies required to assist with your service to the organization
- Purchase of food donated for group meals
Substantiation is very important. First and foremost, because these expenditures will be greater than $250 for a single charitable activity, the volunteer must have a written receipt or acknowledgement from the charity that describes the services provided by the volunteer and whether or not they received any goods or services in consideration of his or her service. Generally 501(c)3 organizations will list the dates and location of services provided by the volunteer and state that no goods or services were provided in exchange for this service.
It is the volunteer’s responsibility to keep detailed records of any out-of-pocket expense incurred. Receipts are the primary source of documentation – remember to make a copy. The carbon papers will often fade over time and you need to retain these records for at least 3 years. We also recommend retaining your boarding passes to prove that it was you who boarded the plane.
Have a Question About Specific Expenses?
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