I’m going to guess that you probably aren’t volunteering for a tax break. Could you do more if you had a little extra time? Or a bit more money in your pocket? Tracking your volunteering expenses may help you free up some money so you may be able to give even more back.

What are some Volunteer Tax Deduction Tips?

Video of Financial Advisor LA  David Rae on CBS News – discussing tax deductions you may be missing, including tax deductions for volunteers. 

When I think of a volunteer who is able to deduct a crazy amount on taxes, I think of Long Beach Estate Planning Attorney Diana Kliche of Sharma Kliche. She always seems to be rescuing some type of animal and her most popular “check-in” on Facebook seems to be at various veterinary clinics. It turns out she happens to be the current president of The Fix Project (aka Fix Long Beach).

Undoubtedly, most pet owners love their pets. Wouldn’t it be great if their veterinary bills, food, leashes, beds, etc. were deductible? Well for volunteers who foster a pet, or several pets, those costs do qualify for a tax break.

As president of The Fix Project, Diana drives throughout Southern California and is constantly fostering pets. She has been known to adopt a few along the way. Being the responsible pet parent/pet foster parent that she is, Diana takes these pets to The Fix Project’s monthly, free spay, and neuter mobile clinic utilizes the free microchipping service, and pays for them to receive low-cost vaccines. As a foster pet parent, she is constantly covering the cost of things like transporting pets, veterinary bills, food, beds, toys, etc.

Let’s be real if you tried to deduct 10s of thousands of dollars in vet bills, the IRS may think you are crazy. Oh, and they won’t think you are eligible for those claimed deductions. On the flip side, if Kliche were to spend that much out of pocket as part of her charity work, she could legitimately deduct those expenses from her taxes.

While your volunteering may not rack up this much expense, you may still be entitled to some deduction. Here are a few things to consider.

Can you deduct expenses from volunteering?

If you are doing good, the IRS would like to do something nice for you by giving you a little tax break for your hard work. If you skip this part when filing your taxes, you may be leaving some money on the table. I know a lot of volunteers may think getting a tax deduction may diminish their hard work for the cause they are passionate about but let me flip that on its head just a bit. With a little extra money in their pockets, they could make a monetary donation to their favorite nonprofit organizations or maybe work a little less, freeing up more time to volunteer. Just a thought.

Either way, the expenses you incur volunteering may add up to a nice tax deduction. To qualify, the amount you are planning to deduct must directly relate to the charity where you volunteer. In addition, you must not have been reimbursed for those expenses. Furthermore, you must also itemize when filing your taxes. Here are a few more specifics of what you can and cannot deduct.

Is time spent volunteering tax deductible?

Sadly, no. You cannot deduct your time regardless of how valuable it may be. Wouldn’t it be amazing if Lady Gaga could say I bill $X per hour and then be able to deduct that amount from her taxes for any hours she spent performing at charity events!

What kind of expenses are tax deductible?

The list of incidental expenses that may be deductible is endless. Volunteers may deduct things like phone calls, postage, paper, or other out-of-pocket expenses. If your volunteer work requires gear or a uniform, these may also be tax-deductible. If you are volunteering at a hospital you may be able to deduct the cost of scrubs and having them cleaned.

Can we deduct commuting to volunteer?

If you use your car as part of your volunteer work you may be eligible for a tax deduction. According to IRS.gov, the standard rate is 14 cents per mile when driven in service of a charitable organization. While this is less than the 56 cents per mile you would be able to deduct if the miles related to business (in 2021), miles driven to volunteer can add up, especially for those who volunteer regularly or drive several miles. An alternative to this would be to deduct the actual cost of unreimbursed gas, but not maintenance.

Can I deduct travel away from home for volunteer work?

Reasonable travel expenses will be deductible if tied to your volunteer work. Arriving via helicopter will likely raise a red flag unless there is some specific reason for it. For those who volunteer in Puerto Rico, flights, lodging, and meals are deductible. Important to note here are meals.  Meals for volunteer service are 100% deductible and not subject to the same 50% limit as meals for business.

Recordkeeping for Tax Deductions

Like any deduction, you will need to be able to substantiate your volunteer expense deductions. Keep good records. Think who, what, where, when, and why.

Fundraising Costs

If you host a fundraiser, you can deduct your unreimbursed expenses as charity expenses. Make sure you keep specific records and if you are at the market buying booze in bulk, put all event-specific items on a separate receipt. This will help make tracking expenses easier.

Both of my chihuahuas are rescues.  While the expense of owning them is not deductible, the donations to the organizations from where we adopted them are tax-deductible.

Live for Today, Plan for a Richer Tomorrow.

DAVID RAE, CFP®, AIF® is a Los Angeles Certified Financial Planner with DRM Wealth Management.  A regular contributor to Forbes.com,  Advocate Magazine, Huffington Post, Investopedia not to mention numerous TV appearances.  He helps smart people across the USA get on track for their financial goals.  For more information visit his website at www.davidraefp.com

For more Volunteer Tax Deduction tips check out this video from KTLA LA News.

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