Did you spend any time volunteering this holiday season? Although volunteering for charitable organizations is a wonderfully selfless act, you may still stand to benefit by receiving some tax breaks. Keep reading to find out if you qualify!
Most Out-of-Pocket Costs Are Deductible
When you volunteer at an eligible charitable organization, you’re able to claim deductions for any out-of-pocket costs related to your service. Here are some examples of tax-deductible expenses you can claim:
- Travel expenses (e.g. round-trip tickets, cab fares, hotel stays, and meals)–provided that the chief design of your travel was to volunteer for the charity and that you did not participate in any lobbying activities.
- Entertainment expenses (e.g. taking a potential donor to a show or dinner) on behalf of the organization, as long as you don’t include your own entertainment in the total.
- Driving expenses (e.g. gas, parking fees, and tolls) if you use your own vehicle to perform your volunteer duties and the organization doesn’t reimburse you.
- Uniform expenses if you are required to purchase and clean a uniform as part of your volunteer work.
Make Sure the Organization Qualifies as a Charity
In order to receive a tax break from your volunteer work, it must be for a “qualified” charitable organization. These are the types of organizations that qualify as charitable, according to the IRS:
- Churches, temples, mosques, synagogues, and other religious organizations
- Organizations devoted to educational, scientific, literary, or other charitable causes
- Domestic fraternal societies, orders, and associations operating under the lodge system
- Federal, state, and local governments (if your contribution is solely for public good) or subdivisions of those governments
- Nonprofit schools, hospitals, volunteer fire departments, civil defense organizations, and public parks and recreation facilities
- War veterans’ organizations
- Certain nonprofit organizations that foster amateur sports competitions
- Certain nonprofit cemetery organizations or corporations
Of course, when claiming deductions on your taxes, it’s never a bad idea to double-check your eligibility with an experienced tax professional. Feel free to call Taxation Solutions, Inc. for a quick consult! We’re here to answer any questions you may have.