Volunteers make the non-profit world go ‘round. Can you imagine a world without volunteers, committee members, and nonprofit boards? Without the selfless contributions of these loyal individuals, some of the greatest events and organizations would cease to exist. Though these individuals are not being paid for their time, there are some tax benefits that may be available. The IRS will not allow a charitable deduction for the value of services provided by volunteers, but there are a few things to keep in mind to maximize the tax benefit of volunteer services.
First is charitable mileage. The IRS allows a standard mileage rate of 14 cents per mile for travel associated with charitable activities. This includes travel to and from board and committee meetings, mileage incurred while doing business on behalf of a charitable organization, or travel to events at which one is volunteering. Parking fees and tolls incurred during charitable travel are also deductible.
Next is other travel expenses. You may claim a charitable deduction for lodging, flights, meals and other costs associated with travel while performing services for a charitable organization. The primary reason for the travel must be related to charitable activities, and there may not be a significant element of personal pleasure, recreation, or vacation associated with the travel. In the case of a convention, unreimbursed expenses to attend as an organization’s representative may be deducted. However, any costs incurred for sightseeing or personal entertainment in conjunction with a convention trip cannot.
Lastly, don’t forget costs incurred to purchase items for use by a charitable organization at events. Food, drinks, decorations, and other such expenses, if unreimbursed, that are purchased for use by the charitable organization at a fundraising event or for general use, would be considered a deductible gift of property.
Keep in mind that the expenses discussed here must be incurred in relation to services provided to a qualified organization, which is an IRS term to define nonprofit groups that are tax-exempt. This includes any organization that is registered with the IRS as a 501(c)(3), as well as churches, schools, nonprofit hospitals, and state and local government entities, such as police or parks departments. A charitable organization should be able to tell you if they are qualified, or you can use the ‘Exempt Organizations Select Check’ tool on the IRS website, to search for qualified organizations. However, this list is not all-inclusive, as it only includes those charities that have registered with the IRS as a 501(c)(3). Churches, schools, and government entities are not required to register, so may not be on the IRS list, though would still be considered qualified organizations.
For more information on this topic, see IRS Publication 526, Charitable Contributions.