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Is volunteer work tax deductible?
Rosterfy takes a look at some of the types of expenses that are tax deductible for volunteers, and those that are not.
Volunteering is the act of an individual contributing time and service for a need, cause or mission. While it is undertaken without the expectation of financial reward, there are instances when you may be eligible for a tax deduction for volunteer work.
So, is volunteer work tax deductible? The answer is a little complex. In this article we’ll look at some of the types of expenses that are tax deductible, and those that are not.
Can you get a tax deduction for volunteer work?
The type of expenses that can be claimed as a tax deduction for volunteer work will likely vary depending on where you are located and what country you pay taxes in. In Australia, the ATO states that tax deductions can only be claimed on expenses incurred while earning an income. As volunteer work is unpaid, expenses incurred while volunteering are not tax deductible. Similarly, the United Kingdom does not allow tax deductions to be claimed for expenses incurred as a volunteer.
The United States is typically more generous when it comes to tax deductions for volunteer work. If the organization you are volunteering for has tax-exempt status with the IRS, and you keep records to verify your claim, you may be eligible for the following tax deductions:
Mileage & travel
Is mileage to volunteer work tax deductible? Yes. Volunteers can claim mileage for travel to volunteer work. The IRS publishes the cents per mile rates that can be claimed for driving a vehicle for charitable purposes. To claim a tax deduction using this method, be sure to keep a record of the number of miles driven, the date, the name of the charity the driving was for, and the work that required the use of the car.
Alternatively, the actual cost of the fuel used can be claimed. In addition to the recordkeeping requirements for mileage, the amount of fuel used and the cost per gallon must also be noted.
Other tax deductible travel expenses include:
- public transport
If the charitable organization requires volunteers to purchase a specific uniform to be worn when volunteering, this is a tax deductible expense. Both the purchase price and the cost of laundering the uniform are claimable expenses. To be eligible for tax benefits, the uniform must be unsuitable for wearing outside of the volunteer work.
If volunteering abroad and self-funding flights, accommodation and meals, these expenses can be tax deductible. US tax law states that there must not be any significant element of personal pleasure, recreation or vacation involved. The travel must be specifically for volunteer work, and the volunteer must work for a full day. So, whether you are volunteering overseas for disaster assistance or to teach in a school, if there is no personal travel involved, expenses for this volunteer work are tax deductible.
What isn’t tax deductible?
The following expenses cannot be claimed as a tax deduction for volunteer work in Australia, the United States or the United Kingdom:
Your time, skills and expertise
A volunteer cannot claim the value of their time, skills and expertise as a tax deduction. Even in the scenario that a volunteer loses income from their paid employment while they are volunteering, their lost income is not tax deductible. A possible solution to this lost income not being tax deductible is corporate/employer-sponsored volunteering.
Expenses that you are reimbursed for
Volunteers may be reimbursed for the out-of-pocket expenses they incur for their volunteer work. This may be the purchase of sun protection products needed to volunteer outdoors, or supplies required for environmental volunteering. Importantly, the reimbursement is not subject to income tax.
Although mileage for volunteer work is tax deductible in the United States, vehicle expenses are not. Vehicle expenses include:
- tires and repairs
- license or registration fees.
Any personal expenses incurred when volunteering cannot be written off on taxes. For example, paying for childcare while you are volunteering is not a tax deductible expense.
Recordkeeping for volunteer work tax deductions
Volunteers should keep written records to verify any expenses they claim as tax deductions. Records should also be kept when reimbursements are paid to prove that the payment is not subject to income tax.
Volunteer work tax deductions are one of the many benefits of volunteering. In the United States, various expenses relating to volunteer work are tax deductible. Whilst the United Kingdom and Australia don’t offer tax deductions for volunteer work, they do not charge income tax when volunteers are reimbursed for their out of pocket expenses.
Rosterfy exists to connect communities to events and causes they are passionate about through volunteer and paid workforce management technology. Our proven end to end technology allows charities, events and nonprofit organizations to recruit, register, screen, train, manage and report with ease, replacing manual processes with automations to better engage and retain your volunteers and paid staff.
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