Let’s get this popular question, and misunderstanding, out of the way first. You can not deduct the value of your time or services donated to a charity.Volunteers are often surprised about this. Of course, since the volunteer wasn’t paid for the services, they didn’t receive taxable income. No taxable income, no tax deduction – a simple, clean result.
We’re talking in this article about charitable deductions under the Federal income tax rules. Different rules apply to business and other deductions, and under State income tax laws. As always, for more information contact an experienced and capable tax advisor.
First questions to answer
- Do you itemize deductions on your Federal income tax return? If you do, keep reading.
- If you don’t, continue only for information; you won’t be getting a charitable deduction.
- Are you volunteering for a Qualified Organization? Many “nonprofit” organizations, however valuable, are not Qualified Organizations. To be a Qualified Organization, the organization must
- Be a church or
- Be a government or
- Apply to the IRS. Concerning this category, if the charity is listed in the SGO database, it is a “Qualified Organization” — check by going to the SGO Find-a-Charity page. Qualified organizations include other charities listed in IRS Publication 78. Be careful: many organizations have similar names, and an organization could be listed by a former name or “aka” name.
Items you can deduct
- For the use of your car:
- 14 cents per mile to and from the Qualified Organization location, or actual variable costs related to that mileage (look below for more information).
- Plus tolls and parking.
- Other costs, if they are (i) unreimbursed, and (ii) directly connected with the services you gave, and (iii) incurred only because of the services you gave, and (iv) not personal, living or family expenses.
- Be sure to keep good records — you need to be able to show the basis for your deduction.
Don’t travel to the charity by car?
Take the bus, train, subway, taxi or other public transportation to get to and from the charity’s location? As described in more detail under “Other costs” above, you can deduct those costs so long as: they are directly connected and only incurred because of the services you give; and are not personal, living or family expenses (and of course aren’t reimbursed).
Help from the IRS
Yes, 14 cents per mile is silly
Undoubtedly you’ve seen the regular updates from the IRS and other sources concerning deducting costs of use of a car.The Internal Revenue Code requires the IRS to adjust the business and medical mileage rates based on changes in costs of operating a vehicle.
Beginning January 1, 2012, for example, you can deduct 55.5 cents per mile for business miles driven and 23 cents per mile driven for medical or moving purposes. The IRS based the standard mileage rate for business on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study.
The 14 cents is written right in the Internal Revenue Code (without language suggesting it be adjusted for inflation). See IRC Section 170(i) — which is part of the charitable deduction section of the Code. It hasn’t been changed in years. To get it changed, Congress will have to amend it — time to talk with your Congressperson.
You can use actual costs rather than 14 cents per mile
The 14 cents per mile charitable rate is optional. A volunteer can actually deduct all variable costs(includes gasoline and all taxes thereon, oil, tires, and routine maintenance and repairs) of operating the car for volunteer purposes.
- Actual variable costs are likely higher than 14 cents per mile. For example, if the volunteer’s car gets 20 miles per gallon and gasoline costs $3.50 per gallon, the cost of gasoline alone is 17.5 cents per mile.
- By comparison, the medical and moving rate (which is also based on variable costs, but is not limited to a rate set by statute) is now 23 cents per mile.
- Fixed costs (such as depreciation or lease payments, insurance, and license and registration fees) are not allowed for either charitable, medical or moving mileage calculations.
Mileage rate history
Start Date
|
IRS Standard Mileage Rate (cents per mile)
| ||
Business
|
Medical and Moving
|
Charity Volunteer
| |
January 1, 2013
|
56.5
|
24
|
14
|
January 1, 2012
|
55.5
|
23
|
14
|
July 1, 2011
|
55.5
|
23.5
|
14
|
January 1, 2011
|
51
|
19
|
14
|
January 1, 2010
|
50
|
16.5
|
14
|
January 1, 2009
|
55
|
24
|
14
|
July 1, 2008
|
58.5
|
27
|
14
|
January 1, 2008
|
50.5
|
19
|
14
|
January 1, 2007
|
48.5
|
20
|
14
|
For rates prior to 2007 (including special Hurricane Katrina rates in effect in 2005 and 2006) see this IRS document.
Here’s a link to the IRS Schedule A instructions (see page A-8 for Lines 16 and 17):
As you noted, Form 8283 applies to Line 17.
As always, we provide general information, not advice on specific cases — consult your tax advisor.
It sounds like you are a terrific neighbor.
** No one can deduct the value of their time when volunteering (see the initial paragraph of the above article).
** A volunteer can deduct costs for volunteering for Qualified Organization (see paragraph #2 in the above article).
** You might check around in your community to see if there is a Qualified Organization that helps people in the ways you like to. If you help people as a volunteer for a Qualified Organization, you can then deduct mileage and other costs as outlined above.
Ed
The travel and lodging/hotel costs should be deductible (assuming you’re not combining the trip with other purposes).
Answer: No, you cannot deduct payments for child care expenses as a charitable contribution, even if they are necessary so you can do volunteer work for a qualified organization.
This is a bit trickier than it may seem. I’m thinking that maybe business mileage applies, and the business rate is about 4 times as high as the volunteer rate. So, please help me better understand the facts.
If it’s a different organization, is it his only paid job or does he have other paid jobs?
If it’s two or more different organizations, please give an example of his driving miles from home — to the paid task(s) — to the non-profit — then back to home.
Can you distinguish between trips that are “purely volunteer” and those that are “paid volunteer”? Or are you always going to/from the theater as a “paid volunteer”?
A few thoughts for you:
** Continue to keep track of your miles, noting which are for the paid work and which are for the volunteer work.
** Use the business rate for deducting the paid miles (remember, you can’t deduct the commuting portion).
** Use the charity / volunteer rate for the volunteer miles (or, if you are up to it, the actual variable costs — “You can use actual costs . . .” above).
** Put a dollar value on (a) the time and energy you’ll spend keeping track of miles and costs and (b) the tax benefits you’ll receive (the amount of the deduction times your effective income tax rate). If (b) isn’t bigger than (a), consider spending your time on things that are more fun.
Thank you for this informative article. I do have a question regarding record keeping and mileage. Unfortunately we have not been very diligent in keeping travel records during our involvement with our children’s non’profit youth organization, Job’s Daughters. So my questions is, how important is keeping track of the odometer reading when traveling to and from non-profit activities and traveling about town for them? I told my wife she should be good with just going through her calendar for the last 7 months and finding all the times she’s attended activities. Then she can just use a map program to determine the mileage between home and the activity and log it. Am I giving her correct information?
It boils down to being able to back up (prove) the miles driven, in case the IRS asks for more information about the deduction.
The best proof is a carefully and concurrently kept written record.
Very strong = a written log kept each day showing odometer readings, the miles driven and the activities. Very weak = a guess you make on April 14 of the following year. Very sane = some place in between, but closer to the strong end of the scale.
Given that your wife doesn’t have the best already in place, what you’ve proposed sounds very sane. Especially if her calendar was kept concurrently as her activities unfolded.
Do a calculation of the round trip distance to each location (using the shortest route, or the route your wife always takes) using MapQuest, Google Maps or other calculation that you can back up. Then do the arithmetic.
Moving forward, stick with the concurrent calendar showing where she went. At the end of the year she’ll have a pretty good record.
We hope this helps.
As always, we provide general information, not advice on specific cases — consult your tax advisor.
The answer could very well be “Yes” — follow these steps:
I’ll assume you’ve checked out the two basic starting issues: is it a Qualified Organization?, and do you itemize deductions?