Tax Benefits of VolunteeringAugust 23, 2013
Don't overlook the deduction of unreimbursed expenses incurred as a volunteer.
Volunteering comes with a number of benefits, from the great feeling of furthering the mission of your favorite cause to interacting with likeminded people whose ultimate goal is to make the world a better place.
As taxpayers, most people are aware of the deductions allowed by the Internal Revenue Code for cash or property that we donate to qualified nonprofit organizations. However, many people overlook the deduction when it comes in the form of unreimbursed expenses incurred as a volunteer.
The value of your time is not tax deductible however, many other items are. Some typical deductible expenses of a volunteer might include:
- Required supplies
- Uniforms specifically required in their duties as a volunteer
- Baking supplies for a bake sale
- Automobile expenses associated with driving to provide meals to the elderly
- Gifts purchased to be raffled off at a fundraiser
Your challenge is to prove that these expenses were unreimbursed and necessary to accomplish the mission of a qualified organization. As with other charitable contributions, receipts must be maintained for your records.
In order to get reimbursed you must first confirm that the organization is a qualified 501(c)(3) organization. You can do this online by using the IRS Publication 78 or by requesting a copy of the IRS determination letter directly from the organization.
Unreimbursed expenses in excess of $250 will require an acknowledgement from the organization. The acknowledgement will summarize your services and the details of your unreimbursed expenses. Acknowledgements and receipts must be kept with your records to support your deduction in the case of an audit.
If you have any questions about the tax benefits associated with volunteering or would like assistance claiming your reimbursement please contact any member of our tax services group at firstname.lastname@example.org or call 888-KLR-8557.
KLR provides consulting, tax and audit services to over 220 not-for-profit organizations and we are committed to ensuring that our communities are a better place to live and work. We recognize our responsibility of good corporate citizenship and accept our duty to the betterment of the communities where we live and work.