Do you plan to donate your time to charity this year? If travel is part of your charitable giving, for example, driving your personal vehicle to collect donations from local businesses, you may be able to claim these travel expenses on your tax return and lower your tax bill. Here are five tax tips you should know if you travel while giving your services to charity.
1. Qualified Charities. To deduct your costs, your volunteer work must be for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are generally qualified and do not need to apply to the IRS. Ask the group about its status before you donate. You can also use the “Exempt Organizations Select Check” search tool on IRS.gov to check a group’s status or call the office.
2. Out-of-Pocket Expenses. You can’t deduct the value of your services that you give to charity. But you may be able to deduct some out-of-pocket costs you pay to give your services. This can include the cost of travel, but they must be necessary while you are away from home. All out-of-pocket costs must be:
- Directly connected with the services
- Expenses you had only because of the services you gave
- Not personal, living or family expenses
3. Genuine and Substantial Duty. Your charity work has to be real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
4. Value of Time or Service. You can’t deduct the value of your time or services that you give to charity. This includes income lost while you serve as an unpaid volunteer for a qualified charity.
5. Travel You Can Deduct. The types of expenses that you may be able to deduct include: Air, rail and bus transportation, car expenses, lodging costs, cost of meals, and taxi or other transportation costs between the airport or station and your hotel.
6. Travel You Can’t Deduct. Some types of travel do not qualify for a tax deduction, so consult your accountant to be sure. For example, you can’t deduct your costs if a significant part of the trip involves recreation or vacation.