Photo by Cholin
By Rebecca Lennox
In the last 12 months, I’ve made about $500 doing unpaid volunteer work. “How?” you ask. Did I steal money from drugged-up senior citizens in a nursing home? Did I charge homeless people for their dessert at the local soup kitchen? Or perhaps I took the “sell one, eat one free” approach to Girl Scout cookie sales.
Nope. No law-breaking or conscience-ignoring here. I simply took advantage of some nifty IRS tax codes that reward volunteer service. While you can’t claim tax deductions for the value of your time spent volunteering, you can deduct various expenses related to the performance of your work. Of course, these are expenses you wouldn’t incur if you didn’t volunteer, so some people might not see this as making money as much as it is saving it. (You people and your semantics.) But if you itemize deductions on your Federal tax return, and you performed some sort of volunteer work that year, you’d be throwing money away not to claim these deductions:
- Travel expenses. Let’s say you spent every Sunday of a 52-week year volunteering as a tour guide at your local American Polar Bear Versus Penguins Civil War Museum, an IRS-recognized 501(c)(3) educational organization. If said museum is 15 miles from your home, you can deduct 30 miles of travel each trip at the standard IRS mileage rate–currently 14 cents per mile for charitable organizations. At 30 miles a week for 52 weeks, you’re looking at an extra $218 of your annual salary on which you don’t have to pay taxes. The volunteer travel deduction also applies to other modes of transportation as well as parking and toll fees. And if you spend more than 14 cents per mile on gasoline, oil, and volunteer-related vehicle maintenance, you can deduct actual travel expenses instead of just going with the standard mileage rate. Just be sure to log expenses carefully whichever route you choose.
- Lodging costs. If your volunteer organization asks you to pay for your own hotel room at an organizational event, you may be able to deduct the cost of lodging and meals. Just make sure that you’re there as an official representative of the organization to do actual volunteer work. And it doesn’t count if you fly to Hawaii for six days and do two hours of work; the trip must not have a significant element of personal pleasure on that trip. This doesn’t mean you can’t enjoy the volunteer work you do, but it does mean no hookers when you volunteer to work a blood drive on the Las Vegas Strip.
- Other out-of-pocket expenses. Generally any other non-personal expenses directly related to your volunteer work that arose through the performance of the work is deductible.
- Fundraising. While you can’t deduct for lost rent when you let the Save the Dinosaurs Foundation host their annual fundraiser in your backyard, you can deduct your actual incurred expenses, such as electricity and insurance.
- Whaling expenses. If you’re a whaling captain, you may be able to deduct as a charitable contribution the reasonable and necessary whaling expenses paid during the year in carrying out sanctioned whaling activities. What, you think I’m joking? You can read all about the IRS whaling charitable deduction, then go kill some whales for charity!
A few quick caveats before you go off deducting every last volunteer nickel:
- If you get reimbursed for any of these expenses, don’t go trying to deduct them too.
- You’ll want to do a quick search on the IRS website for your organization to ensure the deductibility of the work you do for it.
- The IRS limits your total deductible amount from volunteering to 50% of your adjusted gross annual income.
- Be sure to read over IRS Publication 526 for more information on volunteer and charitable deductions. Don’t worry, it’s an interesting read. I mean it. Honest. Okay, it isn’t. But read it anyway.
Hopefully now that you’re saving money on your taxes, you won’t feel so bad about volunteering a few hours at your area National Adorable Puppy Association shelter. Unless you really hate puppies, in which case you might want to just stick with whaling.
Rebecca Lennox is a freelance writer from Baltimore, Maryland.