By Bennett Whitlock, CRPC® Private Wealth Advisor
Gifts given to charity and other expenses related to volunteering may be tax deductible. For the avid volunteer, the savings could be worth the effort to track expenses related to your charity work.
While you cannot deduct the time you spend on the road driving to and from volunteer events, you may be able to write off related expenses, such as parking, tolls and gas directly used in your charity work. It’s important to note that you cannot claim costs for car repairs, routine maintenance, registration fees, insurance or depreciation. If charity work requires you to travel, you may be able to write-off the amount spent on public transportation, taxi fare, airfare, meals and accommodations. Generally for all travel and driving expenses, the primary purpose of the trip must be to perform services for the charitable organization. A deduction may not be allowed if the trip also includes a significant amount of personal, recreation or vacation activities. If you’d like to include volunteerism as part of your tax strategy, keep reliable written records of your expenses, including the total amount incurred. With regard to driving expenses, keep track of the reason you drove and the date you used your car.
Additional out-of-pocket expenses
If you need to make a purchase to perform your volunteer work, you may be able to claim the purchase as a tax deduction. For example, a committee member might deduct the cost of supplies needed to host an auction. Other expenses could be deductible depending on your situation.
As you tabulate your costs, the amounts must be:
- Unreimbursed. (If the organization has repaid you for an item, you may not claim it on your tax return.);
- Directly connected with the volunteer services;
- Expenses incurred only because of the volunteer services you gave; and
- Unrelated to personal, living or family expenses (For example, childcare is not an eligible expense you can deduct.)
Generally speaking, cash donations you make to a qualified charitable organization are deductible if you keep proper records and itemize deductions. Property you donate may be written off based on the fair market value of the asset at the time of the donation. Note: Special rules may apply to certain contributions. As you prepare for tax season, consult with your tax advisor.
Bennett Whitlock, CRPC ®, is a private wealth advisor and managing director with Whitlock Wealth Management, a franchise of Ameriprise Financial Services, Inc. Learn more at WhitlockWealth.com or call 703-492-7732.