Experienced
Tax Accountant - 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. 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 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
expenses—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.
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