Is Volunteer Work Tax Deductible?
You became a volunteer because you care about your community and wanted to find a meaningful way to help others. But did you know that doing good work may not be bad for your wallet?
If you’re volunteering, believe it or not, the IRS would like to thank you for your service. The expenses you incur while volunteering may add up to a tax deduction. To qualify, the amount you are planning to deduct must directly relate to the charity where you volunteer. In past years, you were only eligible if you itemized your deductions on your annual return, but because of the pandemic, even if you don’t itemize, you may still be able to claim some tax deductions related to your volunteer work.
Some people may think that getting a tax deduction diminishes the hard work they do for a cause they’re passionate about, it does not. But let me make a little suggestion, with a little extra money in your pocket, you could make a monetary donation to your favorite nonprofit, Agingnext! Just a thought.
So in short, is volunteer work tax-deductible? Any volunteer of a §501(c)(3) tax-exempt organization may be entitled to some deductions for out-of-pocket costs incurred while volunteering and receive a deductible charitable contribution for those expenses.
While the amount you can deduct for doing good may not add up to huge dollars, it’s still a great tax benefit of which every volunteer should be aware. We’ve listed five basic guidelines to know about claiming your tax deductions for volunteer work.
#1: You must volunteer for a qualified organization.
In order to claim a tax deduction for charity work, the organization must have a tax-exempt status like Agingnext. Although most public charities, churches and nonprofits are qualified with the IRS, many are not—so double-check a group’s tax status.
#2: You can’t deduct the value of your time.
The IRS doesn’t allow you to deduct the time you spend doing volunteer work. You have chosen to freely give your time to support the organization and you can’t assign a value to that time or the services you provide and deduct it on your tax return.
#3: You can deduct mileage and travel expenses.
When you use a personal vehicle to get to and from the place you volunteer, that’s deductible, as well as the miles you drive providing transportation, delivering meals, or any driving you do that is directly related to the volunteer work you do for your organization. You can choose to:
- Keep a log of your miles and take the standard deduction based on the IRS charitable standard mileage rate of .14¢ per mile. (Yes, this is much less than the allowable IRS deduction for work, but it can add up.)
- Deduct the value (actual cost) that is directly attributable to the service. Example: You drove 10,000 miles this year and 200 were for your volunteer service. You can claim 2% (240 ÷ 10,000) of the cost of gas for the year (You must keep all your receipts and mileage logs.)
You are not allowed to deduct ordinary auto expenses such as insurance, maintenance, tires or depreciation as if you were using your vehicle for business.
You may not deduct your mileage expenses if you are already being reimbursed by your organization.
Reasonable travel expenses are deductible also if tied to your volunteer work. Like attending a conference, or going to provide emergency assistance in the event of a disaster.
#4: Deducting incidental expenses
If your volunteer work requires special gear or a uniform that you must purchase, these may also be tax-deductible along with cleaning expenses, but only if the uniform or item(s) cannot be worn as regular clothing. For example, black jeans and a dark shirt would not qualify, but scrubs or an apron with the organization’s logo would.
The list of incidental expenses that may be deductible can include things like making copies, postage, paper, or other out-of-pocket expenses. You will need to have receipts for any items and you may request an In-Kind Donation receipt from the organization where you volunteer.
Any charitable deduction of $250 or more needs to have official documentation from the charity you are giving goods or services to.
#5: You must itemize tax deductions. Usually.
In order to deduct any charitable expenses or contributions, you must itemize deductions using Schedule A (Form 1040).
2021 Exception to the Rule.
You can get a $300 charitable deduction, even if you don’t itemize. The IRS expanded tax credits as an incentive by the government to encourage Americans to lend a hand to those in need during the pandemic.
For the 2021 tax year, that benefit has expanded even further. Instead of a $300 deduction per return, it’s $300 per person. So if you file jointly with the standard deduction, you can deduct up to $600 for charitable contributions.
That said, there are still benefits to itemizing charitable contributions.
Before 2020, you could deduct charitable contributions up to 60% of your adjusted gross income. The CARES Act raised this limit, allowing you to deduct up to 100% of your AGI, and this temporary change was extended through 2021.
While the amount you can deduct for doing good may not add up to huge dollars, it’s still a great tax benefit of which every volunteer should be aware. You can learn more about how to take advantage of charity work and donations in IRS Publication 526, Charitable Contributions.