Volunteer? Here's What You Need to Know About Snagging a Tax Break

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  • Volunteering is a great way to give back to your community or to an organization you support.
  • Volunteering might also lead the way to certain tax deductions.
  • Unfortunately, you can't deduct the value of your time. 

You may be entitled to some deductions, but you'll need to claim them carefully.

Volunteering is a very fulfilling thing to do. And when you give of yourself to help others, it can benefit you mentally. 

But doing volunteer work might also benefit you financially. That's because there are certain tax deductions you can take as a volunteer. However, it's important you understand the rules so you know what tax breaks you can and cannot claim.

Eligible deductions for volunteers

Let's get one thing out of the way. To claim a tax deduction for volunteering, you must do that work for a registered 501(c)(3) organization. But as long as you meet that requirement, you may be able to deduct certain costs you incur in the course of volunteering. 

Let's say you volunteer at a local community center by spending time with underprivileged children. Let's also say you spend $15 every time you visit so you can bring art supplies you know those children don't have. That $15 expense is an allowable deduction (as long as you retain your receipt). 

Similarly, you might spend money to get to your volunteer opportunities. If you drive, you can deduct mileage on your vehicle at a rate of $0.14 per mile. But you can't deduct other expenses related to your vehicle, like maintenance, repairs, and auto insurance premiums.

Along these lines, let's say you pay $20 for a bus ticket to travel to a neighborhood in another city where you help revamp a school in poor condition. You can generally deduct the cost of that ticket. But be prepared to show proof you purchased it, as well as proof you volunteered on the day you said you did. 

The one thing you can't deduct

While the IRS will allow you to deduct different expenses you incur in the course of volunteering, it won't allow you to deduct the value of your time. 

So, let's say you're a freelance architect who charges clients $100 an hour. If you give up three hours of your time every month to volunteer, you can argue that doing so means earning $300 less. But unfortunately, you can't take a $300 deduction for doing that work. This holds true even if you can prove that $100 an hour is your going rate (say, by showing copies of signed contracts with clients). No matter your line of work or hourly rate, you simply can't be reimbursed by the IRS in any way for giving up your time. 

What can volunteering do for you?

As a volunteer, you may be entitled to some amount of tax savings. But ultimately, people who volunteer generally do so because they want to -- not because they get to save a few dollars on their IRS bill. 

If you're interested in volunteering but have yet to get out there, it pays to explore different opportunities, whether it's walking dogs at an animal shelter or delivering meals to seniors. Volunteering could give you something meaningful to do with your time and actually make you feel better about yourself.

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