Some Costs Of Charity Work Deductible
Are you an active volunteer for charitable organizations?
When the annualreckoning with the IRS rolls around, your good deeds can pay off in the form of write-offs for unreimbursed expenses. There are many possibilities, though some expenditures never pass muster and others are subject to restrictions.
Only out-of-pocket outlays count. Your volunteer efforts entitle you to deduct only what you spend to cover unreimbursed outlays. These items include the cost of telephone calls, stamps and stationery, as well as other materials that you supply, say, to make posters or bake cakes. Forget about any deduction, though, for the value of the unpaid time that you devote to charitable chores. Nor does the law allow you to claim anything for the use of your home or office to conduct meetings.
Uniforms. Does your volunteer work require you to wear a uniform? Don’t forget to claim the purchase price and cleaning bills for clothing not adaptable to ordinary wear. Some of the more-common examples are Red Cross volunteer and Scout leader uniforms.
Baby sitters. The IRS takes a dim view of deductions for baby sitters who watch children while the parents do charity work. The payments for sitters, concedes the IRS, are incurred to make the volunteer work possible. Nevertheless, the agency ruled that the payments are nondeductible personal expenses.
Take heart, though. An IRS administrative ruling is by no means the last word. It merely reflects the official IRS position on an issue and is not binding on the courts, notes William R. Cousins III, an attorney in Dallas. The Tax Court has held that baby-sitting fees that enable you to get out of the house are allowable, the same as car expenses linked to charitable work.
Blood donations. An IRS ruling says no deduction for donating blood, except for any travel expenses to and from the blood bank. Why? Because, the IRS reasons, you are performing “services” and not donating property. On the other hand, the IRS insists on its share of any payment that you receive for providing blood.
Travel. An often-missed outlay begins the moment that you leave your home. Your allowable deductions include travel expenses to get to committee meetings, fund-raising events, and so on.
If you travel to and from your volunteer work by bus, train or taxi, just make sure to keep track of your fares and claim them as travel expenses. If you use your own auto, claim a standard rate of 12 cents a mile. Remember to deduct parking fees and bridge or highway tolls, as well.
For example. In the course of your charitable work this year, you drive 1,000 miles and shell out $40 for parking charges. Your allowable deduction is $160 (1,000 miles times 12 cents equals $120, plus $40 parking).
Tip. It is a good idea, in case an IRS examiner questions your charitable travel, to be able to support your deductions with a glove-compartment diary in which you record why and how far you went, as well as what you spent on parking. You do not have to use the same car each time and can use more than one car at the same time. If you rent an auto and drive it only for charitable travel, include the entire rental charge with your other charitable expenses.