Is Volunteer Work Tax Deductible?
Nearly one-third of Virginia residents volunteer their time every year. During 2016, the economic impact of more than 270 million hours of volunteering was $6 billion. Providing service to help those less fortunate in our communities is important; and if you are a volunteer, there may be some tax deductions you are entitled to; however, your time is not tax deductible.
Paid Work vs. Volunteer Work
Oftentimes people believe if they are forfeiting volunteer work for paid work they are able to deduct the loss of income. This is incorrect: the IRS does not consider the time you forfeited at a paid job as a loss of income; you cannot deduct the time from your taxes. This does not mean your volunteer work does not offer some tax benefits however.
Tax Benefits of Volunteering
Just because the time you spend volunteering is not tax deductible does not mean there are not tax breaks available for volunteering. Here are a few of them:
- Travel expenses – whether you are traveling to an event to volunteer in your community, or you are traveling around the world to provide assistance, if you itemize your deductions your mileage may be deductible. There are other travel expenses, which if not combined with personal travel may also be deductible including hotel accommodations, meals, and air travel expenses. As with any other expenses, it is imperative you keep good records of expenses, and the reasons for the expenses.
- Solicitation expenses – if you are wining and dining a prospective donor, there may be expenses involved in getting them to help your organization. If you are taking them to dinner, provide tickets to a ballgame, or the theater as part of the solicitation process, you may be able to deduct some, or all of the unreimbursed expenses associated with the solicitation. Your tax preparer can help you determine if the expenses are deductible.
- Volunteer clothing – if the organization you volunteer with requires you to wear a certain uniform, you may be able to deduct the cost of purchasing the uniform. Keep in mind, if the uniform is suitable for everyday wear, you cannot deduct the expense. Items like polo shirts, vests, etc, that may contain the volunteer organizations logo are typically not deductible; uniforms such as those worn by volunteer firefighters may be deductible.
- In-kind services – some volunteers provide valuable services to various organizations. Printing flyers, running advertising, or similar services may be deducible; particularly if you are a small business owner. You may also be able to deduct donations made to charitable organizations for printing an advertisement on a placemat, or advertising book the organization is publishing. Talk to your tax preparer to determine if, and how you can deduct these expenses.
While you may not be able to deduct your time spent working as a volunteer, you may still gain some tax benefits from your volunteer services. If you are a regular volunteer, contact Rue & Associates and let’s discuss your non-time contributions; you may be able to lower your taxable income if you have properly documented your expenses.