Growing up many of us are taught the importance of giving back to the less fortunate. Whether it’s donating clothes that no longer fit or giving a few dollars to someone in need, small gestures can make a big difference in someone’s life. Donating your time is just as good as opening your wallet. If you took a trip to lend a helping hand, you might be able to deduct the costs on your tax return.
Pick a qualified charity
In order to deduct the travel expenses for your volunteer work, your services must be given to a qualified charity. With the exception of churches and governments, charities must apply with the IRS in order to become qualified. Take a few minutes to check the charities tax exempt status on IRS.gov before making any donations.
Out of pocket expenses
You can deduct the cost of travel if you were required to be away from home in order to give your services. Qualified costs must be:
• Related to the service
• Expenses you only had because your chose to volunteer
• Not for family, living or personal expenses
Giving back must be your sole purpose
Summer is the prime time for a getaway with your family and friends. When you’re on vacation you get to see how the other side lives and it isn’t always pleasant. It may spark a desire in you to do something to help. Unfortunately, you can’t volunteer your services for a couple hours out of a five day trip and expect to deduct the travel costs on your tax return. Your charity work has to be the one and only purpose of your trip in order for your expenses to qualify.
You can’t put a value on time or service
There’s no price tag for giving back. If you lost money because you chose to volunteer your services rather than go to work, you’re just going to have to take the loss. The value of your time or service can’t be claimed on your tax return.
Deductible travel expenses
You can deduct expenses for:
• Lodging costs
• Cost of meals
• Car expenses
• Bus, air and train transportation
• Taxi between airport and your hotel
There aren’t any rules that say you can’t have a good time doing charity work but remember, you can’t deduct your travel costs if majority of the trip was spent sight seeing and partying like a rock star.
ezTaxReturn supports charitable contribution entries and guarantees the biggest possible refund when you file with us.