There are tax breaks when you do charitable
work
If you do volunteer work for a charitable
organization and have not kept track of your out-of-pocket expenses, you might
be passing up an excellent opportunity to lower your tax bill. To qualify, your
unreimbursed expenses must relate directly to the charity, and you must itemize
your deductions on your tax return. Here is a brief rundown of some possible
deductions.
* Volunteers may deduct the cost of phone
calls, postage stamps, supplies, and other out-of-pocket costs incurred in
their volunteer work. For volunteers who are required to wear a uniform, the
cost of buying and cleaning uniforms is deductible if they are unsuitable for
everyday wear.
* The cost of your time, no matter how
valuable it may be, is not deductible. That's true even if you would normally
be paid for the type of service you contribute. For instance, accountants who
perform free consulting for charities can't deduct what they would normally
charge for their services.
* Using your car in connection with
volunteer work can earn you a deduction. The standard mileage rate for
volunteers who use their own cars is 14 cents per mile. Alternatively, you may
deduct your actual unreimbursed expenses for gas and oil - but not maintenance,
depreciation, or insurance. Either way you choose, related parking fees and
tolls are deductible as well.
* If you travel overnight for charitable
purposes, your expenses are deductible as long as they are reasonable in amount
and not connected with personal activities or any element of recreation.
* Special rules apply to conventions.
Travel and other out-of-pocket expenses related to attendance at a convention
for volunteers are deductible only if you have been chosen as a delegate to
represent the organization.
Finally, just remember that it is up to
you, the volunteer, to substantiate your deductions. If you take these
deductions, you should be prepared to show the IRS the connection between the
costs claimed and the charitable work performed.
