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Tax Credits for Volunteering Costs

credits and disclaimer

In the USA, volunteers - people who do unpaid work for nonprofits, schools, fire stations and other public, not-for-profit, mission-based, USA-registered organizations - can receive tax deductions from the federal government on many costs associated with volunteering, such as mileage and other travel expenses, paper, copying, convention attendance fees, parking, uniforms (if the volunteer purchases his or her own), etc.

However, these tax deductions apply ONLY if

  • you are NOT getting reimbursed for these expenses by the organization you are assisting, and
  • you are itemizing on your tax form (not if you use the 1040 EZ form) 
  • the primary purpose of your experience is to complete tasks - WORK - not have fun, sight-see, explore, etc.

Hours spent volunteering are not tax deductible.

Pro bono consultants will sometimes agree with a nonprofit BEFORE work is done that the consultant will bill the organization for the work, the organization will pay the consultant for the work, and then the consultant will give all of the money back to the nonprofit as a donation. Talk with a tax accountant for more information, and make sure any such donation agreement is made with the nonprofit BEFORE work is done, so that there are no misunderstandings. Be aware that most nonprofits will NOT have the budget to do this, even though you are saying you will donate the funds back to them - they just don't have that kind of cash on hand.

Don't trust me

Thanks for reading this page, however, only the IRS web site has complete, up-to-date information about tax deductions related to volunteer.

Do not rely on the web site you are reading now for the most up-to-date information about tax deductions and volunteering.

This information is from the IRS web site:

    "Contributions you cannot deduct at all include contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance. You cannot deduct contributions that you give to qualified organizations if, as a result, you receive or expect to receive a financial, or economic benefit equal to the contribution.

    Although you cannot deduct the value of your time or services, you can deduct the expenses you incur while donating your services to a qualified organization. If the expenses are for travel, which may include transportation and meals and lodging while away from home, they may be deducted only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Actual costs of gas and oil can be deducted..."

Remember that most agencies do NOT reimburse volunteers for costs associated with volunteering. If you think you are going to incur a cost because of a volunteering task, get approval from the agency first; there may be a way to work it out so that it's not necessary for you to incur costs at all. Even if the organization cannot reimburse you, they may want a written record of your expenses, to document the "costs" of volunteering for some people, because many funders and boards of directors do not understand that volunteering can actually create costs for a volunteer.

Mileage for Volunteers

When volunteers drive their own vehicle to carry out a task for the organization, the IRS permits them to deduct a small amount per mile - check the IRS web site for info on the current rate. It is less that the business rate for mileage. Organizations that reimburse the volunteer at the higher rate can put the volunteer in a precarious tax position - the IRS has sometimes tried to collect taxes on the difference. Some tax payers have been subjected to penalties and interest for mileage reimbursement for their volunteer miles.

Volunteering over several months, in the USA but away from your home

Some travel expenses may be deducted for such away-from-home volunteering. However, the volunteer work must be done for a qualified tax-exempt nonprofit. You can visit IRS.gov and use the Select Check tool to see if the organization is qualified. You may be able to deduct unreimbursed travel expenses you pay while serving as a volunteer but you cannot deduct the value of your time or services.

"The deduction qualifies only if there is no significant element of personal pleasure, recreation or vacation in the travel. However, the deduction will qualify even if you enjoy the trip." In other words, you can deduct your travel expenses if your work is real and substantial throughout the trip - if your work, every day, takes up MOST of your time, rather than sight-seeing. Deductible travel expenses may include:

  • Air, rail and bus transportation
  • Car expenses
  • Lodging costs
  • The cost of meals
  • Taxi fares or other transportation costs between the airport or station and your hotel

To learn more see Publication 526 Publication 526, Charitable Contributions. The booklet is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

What about costs of volunteering overseas?

It's very likely that the costs of volunteering overseas - air travel, in-country accommodations, ground transportation, mileage, etc. - is NOT tax deductible, because the majority of volunteering overseas programs are about giving you a cultural experience, rather than your doing necessary work that local people cannot do themselves. Many volunteer vacation sites say otherwise, but DiscoverCorps agrees with me and advises against trying to get tax deductions for this kind of travel - their page explains why much better than I can.

If you are in the Peace Corps, UN Volunteers, VSO, or other organization that places highly-skilled people in LONG TERM volunteer placements abroad, you may be able to take many of your expenses as a tax deduction on your itemized tax form. That's because volunteer work on these trips is real and substantial throughout the trip - you will work, every day, for most of the day, and this work will take up MOST of your time, rather than sight-seeing. In these assignments, there no significant element of personal pleasure, recreation or vacation in the travel - even if you do have fun while on the assignment. Go to Google or Bing and search on this term to find the most up-to-date official information from the IRS on this subject: is peace corps travel tax deductible

You may also want to review these resources regarding labor laws and volunteering.

If you feel mistreated as a volunteer, here is advice for volunteers on how to complain.


 

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The Financial Peace Planner: A Step-by-Step Guide to Restoring Your Family's Financial Health by
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The Everything Guide To Personal Finance For Single Mothers Book: A Step-by-step Plan for Achieving Financial Independence (Everything (Business & Personal Finance) by Susan Reynolds

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