Many people are aware that if they make charitable contributions or donations, they may be eligible for tax deductions. They also think that there is no tax benefit if they donate time instead of money or other material goods.

But those who donate items may not know how to maximize a charitable donation tax deduction. Additionally, volunteers may not realize that they can make deductions based on their work with a non-profit or charity in specific ways.

Charitable Donation Deductions

Obviously, if you make a cash donation, that is a fairly straightforward deduction from your taxes. Additionally, you may donate items to Goodwill, Salvation Army, or other charities, and just take the standard $500 deduction for charitable contributions without a receipt.

However, get a receipt to acknowledge a donation. You will notice it will contain a list of the items you have donated---but not the value of those items. Organizations like the Salvation Army have Valuation Guides to help you determine the value of all the items you donated; taking the time to calculate the actual value of your donation will likely result in a larger deduction.

Volunteer Deductions

If you volunteer with a charity or non-profit organization, you probably aren’t doing it for tax rewards (and if you are, there isn’t much).

There are no deductions to make up for the time you spent working with the charity. But you may be able to deduct the incidental expenses, travel, and cost of operating personal property related to your work with them. Some examples are:

• Incidental and operational expenses: Such items include stationery, postage, or phone call charges related to advocacy for a charity or non-profit organization. Additionally, if you have equipment (e.g.: office equipment, cameras, etc.) related to your work that generates related expenses from the work you perform(e.g.: film, printer cartridge) , it is also a deduction.

• Travel to and from charity sites: There is a mileage-based deduction for your travel related to volunteerism (e.g.: to and from a counseling center or outreach center, or to and from a client of an organization for which you perform volunteer work).

• Overnight or multi-day travel and expenses related to a volunteerism trip: You may be able to deduct the costs of lodging, food and travel for a overnight travel related to your volunteer work, as long as the focus of the trip is based on charitable work.


Your incidental expenses should be $250 or more. Additionally, you will need to keep records of your volunteerism-related expenses. You can either have the organization write a receipt for the expenses you incur, or maintain accurate documentation of your volunteer expenses.

As for charity site-related travel, you will need to keep accurate records of the mileage you accumulate, then multiply that by a federal mileage rate for volunteerism to calculate a mileage deduction.

If you are taking the overnight or multi-day volunteer travel deduction, you must be representing the charity or non-profit organization. A vacation for your own leisure in which you perform one volunteer act is not a volunteerism-related trip.

You should always consult a tax professional for more details about the tax deductions and tax savings strategies you can take advantage of personally or in business. After all, professional services are also tax deductible; see “Equipment, Expenses, and Professionals for Hire: More Small Business Tax Savings” for more tax-reducing deductions that may also work if you are an employee.

References

Dianne Molving. Credits and Deductions Save You Tax Dollars

Roy Lewis. Untitled

Conrad Teitell. Tax Deductions for Volunteers