Most Americans know that charitable donations are tax deductible. You might request a receipt when you donate second-hand clothes or furniture to a charity. When you make a more substantial contribution–let’s say you buy a computer for a local nonprofit business–you get a receipt for an in-kind donation. But what about when you give your time? It’s valuable, too.
Nationwide, the value of volunteer hours exceeds $184 billion dollars annually, according to Americorps. Every year 77 million Americans give a combined total of nearly 7 billion hours to charity. If you’re one of them, read on. You might want a record of your service handy the next time you file your taxes.
Is Volunteer Work Tax Deductible?
Giving back to the community has benefits. It helps build skills and form friendships, not to mention it feels great. However, most people feel strapped for time and therefore give careful consideration to how they spend it.
While your time is valuable, the IRS will not consider those volunteered working hours tax deductible. However, there are still some deductions you can receive as part of your donated working hours.
Imagine you volunteer in a church’s library. The library is small and doesn’t have a computerized system for checking new books in and out. You, therefore, hand make all of the checkout cards and Dewey Decimal stickers. If you buy these index cards, stickers, and ink for the printer, then you can deduct these supplies on your taxes.
Mileage or Gas
Are you volunteering by driving the elderly to their hospital appointments? If you’re using your car while volunteering, you can claim the miles. Just keep track of the odometer. If you start lose track of how many miles you’ve driven during volunteer hours, you can claim the gas you’ve purchased for this time instead. Keep in mind that the IRS will not deduct all of your fuel charges, just what you’ve used during your service time.
Does your volunteer work require travel? You can also claim these expenses. Again, you cannot use your time as a deductible, so any travel time to your destination will not be considered. However, if you’re a volunteer firefighter traveling to California to help with the wildfires, your travel expenses can be deducted. This will include your plane tickets, rental car, lodging, and food.
Keep Track of your Receipts
Keeping track of your expenditures is vital. Should you be audited for any of your charitable donations, the IRS is going to want to see proof of the purchases you claimed. It doesn’t matter the size of the purchase. If you claim it, you need a receipt.
Filing Your Deductions
It should come to no surprise that the IRS will require you to complete paperwork. They have a few different forms for filing deductions for charities. You will have to fill out the 1040 Itemized Deduction form for any monetary donations. For any of your non-monetary contributions, there is another form called the 8283 Noncash Charitable Contributions.
Why not get a head start on your 2019 tax return? If you need help filing the paperwork for your charitable donations we are happy to help.