Tax Considerations for Volunteers
Do you currently volunteer with a charity group, or are you considering a volunteer role? This is a great way to serve your community and help a worthy organization. While you are generous with your time and money, you should be aware of certain favorable tax implications and track your expenses accordingly. Here are a few tax situations relating to volunteer work.
Charitable Mileage Deduction
As you travel to and from your volunteer activities, your mileage is deductible to the extent that it was not reimbursed by the charitable organization. For 2017, the standard mileage rate is 14 cents per charitable mile. Another option is to deduct your actual vehicle expenses, such as fuel and oil, as they relate to your volunteer commuting. Either method may be used, but not both. Expenses related to driving, specifically road tolls and parking fees, may be deducted regardless of the vehicle expense method elected.
Travel expenses for your charitable work are deductible only if you are “on duty” for the entire time you are away from home. For example, if you are a trip leader for a non-profit group such as 4-H and are responsible for overseeing the youth for the full duration of the trip, and all of your activities during that time relate to the purpose of the trip, then you may deduct the travel expenses you incur.
If your charitable organization requires that you wear a uniform during your volunteer activities, you may deduct the cost of the uniform as well as upkeep. The uniform must not be suitable for off-duty wear. For example, if you volunteer for a charity performing clerical work and are requested to wear business casual clothes, you may not deduct the costs of these clothes as they could easily be worn on other occasions. However, if you volunteer as a scout troop leader and must wear a scouting uniform, the cost of the uniform may be deducted.
Charitable expenses are tax deductible the year in which they were incurred, and these expenses must be unreimbursed. The work performed must be for a qualified organization. Generally, your charitable contributions are limited to 50% of your Adjusted Gross Income (AGI). Additional limitations apply to high-income taxpayers. As a best practice, keep all receipts and documentation related to your charitable expenses. Reliable written records detailing the time, date, and location must be kept in the event of an audit.
If you would like further information on this topic or have a tax situation you would like to discuss, please feel free to contact us. One of our experts would be happy to help you.