Tax Breaks for Volunteer Workers for a Charity.
If you are a volunteer worker for a charity, you should be aware
that your generosity may entitle you to some tax breaks.
Although no tax deduction is allowed for the value of services
you perform for a charitable organization, some deductions are permitted
for out-of-pocket costs you incur while performing the services (subject
to the deduction limit that generally applies to charitable contributions).
This includes items such as:
- Away-from-home travel expenses while performing services for a
charity (out-of-pocket round-trip travel cost, taxi fares and other
costs of transportation between the airport or station and hotel,
plus lodging and meals). However, these expenses aren't deductible
if there's a significant element of personal pleasure associated with
the travel, or if your services for a charity involve lobbying activities.
- The cost of entertaining others on behalf of a charity, such as
wining and dining a potential large contributor (but the cost of your
own entertainment or meal is not deductible).
- If you use your car while performing services for a charitable
organization you may deduct your actual unreimbursed expenses directly
attributable to the services, such as gas and oil costs. Alternatively,
you may deduct a flat 14¢ per mile for charitable use of your
car (for expenses incurred before Jan. 1, 2009, a higher amount if
you used your car to assist in relief efforts related to the 2008
Midwestern disaster). In either event, you may also deduct parking
fees and tolls.
- You can deduct the cost of a uniform you wear when you do volunteer
work for the charity, as long as the uniform has no general utility
(e.g., a volunteer ambulance worker's jumpsuit). You can also deduct
the cost of cleaning the uniform.
No charitable deduction is allowed for a contribution of $250 or
more unless you substantiate the contribution by a written acknowledgment
from the charitable organization. The acknowledgment generally must
include the amount of cash, a description of any property contributed,
and whether you got anything in return for your contribution. This
presents a problem where you as a volunteer make a contribution on
behalf of rather than directly to a charity. One way around this is
for the charity to pay for the expenses, itself, and then be reimbursed
by you (or you can make the donation before the expense is incurred).
If this isn't possible, you can safeguard your deductions as follows:
- Get written documentation from the charity about the nature of
your volunteering activity and the need for related expenses to be
paid. For example, if you travel out of town as a volunteer, get a
letter from the charity explaining why you're needed at the out-of-town
location.
- If you are out-of-pocket for substantial amounts, you should submit
a statement of expenses and, preferably, a copy of the receipts, to
the charity, and arrange for the charity to acknowledge in writing
the amount of the contribution.
- You should maintain detailed records of your out-of-pocket expensesâ??receipts
plus a written record of the time, place, amount, and charitable purpose
of the expense.
I would be happy to assist you with any other questions you may
have about deductions related to your charitable contributions.
Jeanette Travieso, CPA
(305) 846-6838
jt@doraltaxcpa.com
www.doraltaxcpa.com
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