Understanding 7+ Key Tax Deductions for Volunteer Work

September 02, 2024

Tax deductions for volunteer work or charitable deductions are reserved for the expenses you incurred while providing help at charities. Some of these expenses include car expenses, travel costs, uniforms, telephone charges, home entertainment, and out-of-pocket expenses.

Aside from the said type of expenses, you can only deduct volunteer work expenses for charities recognized by the IRS.

That said, if you’re looking for an answer to the “Can I claim tax deductions for volunteer work?” question, keep reading this article. You’ll find out more about how you can write off deductions that come with volunteering and fulfilling charitable causes.

Key Takeaways

Tax deductions for volunteer work are applicable to the expenses incurred by carrying out or organizing charitable activities for qualified organizations.
The IRS’ requirements for claiming volunteer work deductions include travel and mileage expenses, telephone charges, entertainment expenses, uniforms, cash donations, and noncash gifts.
You cannot deduct the time you spent volunteering or the charity services you provided since volunteer work in itself is a nonprofit-generating activity.
One of the main requirements of the IRS to qualify for tax benefits for volunteer work is that the recipient or beneficiary of the charity be a tax-exempt organization.
It is crucial to verify the tax-exempt status of nonprofit organizations to avoid getting scammed or exploited by fake charities.

Is Volunteer Work Tax Deductible?

No, volunteer work alone is not tax-deductible, but the expenses that you incur while volunteering can be written off on your returns to reduce the taxes you owe.

In other words, the act of volunteering in itself, as well as the value of time that you dedicated to offering charity work to nonprofit organizations, is not tax-deductible.

After all, volunteer work is supposed to be free—and you cannot generate profit from it. However, there is also no denying the fact that organizing and implementing charity programs also requires resources and a significant amount of money to make it happen.

4 Key IRS Requirements for Volunteer Work Tax Deductions

The IRS’s requirements for volunteer work tax deductions are designed to prevent unqualified organizations from attempting to evade taxation by masquerading as a charitable group.

In the same manner, verifying that volunteers claiming tax deductions carried out charitable activities for verified or legitimate nonprofit organizations ensures that the tax write-offs are valid.

To help you get a better grasp of how tax deductions for volunteers work, let’s briefly discuss each of the conditions that make you qualified to claim incurred expenses for volunteering:

#1. Tax-Exempt Recognition

An organization gains tax-exempt recognition if it generates income mainly from donations and voluntary contributions. Examples of tax-exempt organizations are charitable foundations, health organizations, and social welfare organizations.

If you need to verify whether an organization is tax-exempt, you can use the IRS’ Tax Exempt Organization Tool—an online search tool with relevant databases that enable taxpayers to search and verify a nonprofit organization’s tax-exempt status.

The said tool also prevents fake charities from attempting to prey on well-meaning and unsuspecting businesses and individuals.

According to part six of the IRS’ Dirty Dozen—a list of the worst tax scams for the year 2024—fake charity scams are more rampant whenever there are natural disasters or calamities. Fraudsters, unfortunately, use these tragedies to create fake donation drives.

#2. Unreimbursed Expenses

Volunteers looking to deduct their out-of-pocket charitable costs must only claim unreimbursed expenditures that are relevant to the volunteering services.

Some taxpayers make the mistake of claiming tax deductions for charity work that has already been reimbursed by the charity or the volunteer organization that they are in cooperation with. When this happens, it creates discrepancies in your tax records.

#3. Complete Financial Records

Volunteers and organizations must have accurate and complete auditing records and documentationof their expenses to ensure that their deductions are correct and qualified for a tax exemption.

Volunteers and donors must also describe the type of volunteer work that they provided and specify whether the recipient organization gave or supplied anything in exchange.

#4. Written Acknowledgment

If the claimed tax deductions for volunteer work amount to $250 or more, the donor or volunteer must acquire a contemporaneous written acknowledgment from the recipient organization.

The acknowledgment must be obtained on the same date when the volunteer files their return for the year when they completed the volunteer services.

7+ High-Value Volunteer Work Expenses That Are Tax Deductible

There are several volunteer work expenses that you can deduct from your taxes. These expenses are mostly out-of-pocket expenses for charitable volunteer work that you incurred while organizing and carrying out your volunteer services.

Here’s a closer look at the tax deductions for volunteer work:

#1. Away-From-Home Travel Expenses

Away-from-home travel expenses are a type of tax deduction for volunteer work that allows you to deduct transportation costs on airfare, bus, cabs, or train, provided that the location of your voluntary services is far from your place of residence.

You can also include your meals and accommodations in your travel expenditures. It is important that your itinerary, purpose, and incurred expenses are all for the sole purpose of fulfilling charity services.

That means you cannot include or itemize personal vacation and travel costs.

#2. Entertainment for Charity

This tax deduction covers all out-of-pocket expenses incurred from overseeing charity events, such as fundraisers, meals, and drinks provided to the beneficiaries. The said expenses must be specified to maximize possible tax deductions for volunteer work.

If possible, keep receipts of all your transactions, particularly when you purchase materials and ingredients for the food or book venues to host your volunteering activities. The key is to have a comprehensive and reliable reference later on when you file your taxes.

#3. Mileage Expenses

Unlike tax deductions for independent contractors that involve vehicle use, the said tax write-off for volunteers does not include maintenance, depreciation, car insurance, or registration fees.

As such, the volunteer work tax deductions you can claim are limited to the cost of fuel used per gallon and the amount of fuel used. You may also itemize tolls and parking payments.

#4. Uniforms

While wearing uniforms is not required when volunteering, some charitable work or activities may require volunteers to wear a uniform for security purposes.

For example, volunteers in an orphanage, animal shelter, or retirement home may be asked to wear a uniform to make it easier to identify and recognize the volunteers.

Wearing uniforms also boosts a sense of teamwork and camaraderie, which are essential skills and traits in any activity or task that requires cooperating with different groups and individuals to achieve a common goal.

In that regard, if you want to write off uniform expenses, your uniform must not have any general utility. In other words, it must not be tailored for everyday wear.

#5. Telephone Charges

Telephone charges in the context of volunteer work tax deductions refer to long-distance and local calls made to communicate about charity-related responsibilities and arrangements.

The easiest way to deduct telephone charges and cellular service usage is to document your total phone costs for the calendar year when you did voluntary services.

If you use your phone for both volunteer and personal communications, try to determine the percentage of telephone use dedicated to your charitable work and separate it from your personal calls.

#6. Volunteering Seminars and Conventions

Some tax deductions for volunteer work may be a combination of other qualified tax write-offs.

For instance, if you had to attend conventions or seminars that are focused on your specific charitable work, you could combine transportation, lodging, and meal expenses and itemize them in your returns.

#7. Gifts or Noncash Donations

Claiming noncash donations on your returns will depend on the value of your gift. To make it easier to figure out the total amount of your noncash gifts or donations, list down all your charitable contributions.

Next, add the value of all your noncash contributions, then check the market value of the items to get an accurate estimate of the total amount you can deduct.

You must file Form 8283, Noncash Charitable Donations, and fill out Section A if the combined value of your noncash donations is worth $500 or more but does not reach or exceed $5,000. Fill out Section B instead if the gifts cost $5,000 or more.

For gifts worth less than $250, request a written receipt bearing the nonprofit organization’s name, as well as a description of the items and the location and date when you donated the gift.

#8. Cash Donations

When claiming cash gifts to tax-exempt and charitable organizations, you must acquire a receipt that shows the total amount you donated and the date when the money was given to charity.

If the organization gave you a gift in exchange for your donation, then the receipt must provide the item’s brief description and estimated value.

You might also need additional forms and documents, such as bank and credit card statements, bank checks, and email confirmation messages for online money transfers.

Is the Time Spent on Volunteering Tax Deductible?

No, the time spent on volunteering is not tax deductible. You cannot assign a value to the hours or time you’ve dedicated while volunteering.

Tax deductions for volunteer work should only be reserved for the out-of-pocket expenditures that are directly related to your charity work.

Now, if you missed work or lost income because you dedicated time volunteering, the IRS isnot obligated to refund losses in your earnings or profit.

Similarly, you cannot add monetary value to your charity services. The primary objective of any volunteer or charity work is to offer assistance to people in need.

Unless you’re a social worker or someone who works for a government agency that focuses on providing social welfare services, your volunteering activities are not meant to generate income or enable any kind of business-like transaction that the IRS would deem taxable.

What Other Expenses Are Not Tax Deductible?

There are also specific expenses that are not tax-deductible for volunteers or charity workers. These non-tax-deductible volunteer expenses include:

Expenditures of other volunteers. You cannot claim other volunteers’ expenses or volunteer work tax relief on your returns. Let your fellow volunteers write off their qualified deductions on their own tax returns instead.

Volunteering hours. Volunteering is not a job and, therefore, is not considered profit-generating. However, you can deduct expenditures that come with preparing fundraising events and charitable activities.

Reimbursed expenses. If your volunteer expenses have already been reimbursed, then you can no longer claim them in your returns. The IRS will know whether your claimed deductions have already been reimbursed or not.

Personal expenses. If you went sightseeing at a nearby tourist spot, ate at a restaurant, or spent money on non-charitable activities after volunteering, you cannot request to have your expenditures reimbursed.

How to List Volunteer Work Tax Deductions on Your Return

Use Schedule A of Form 1040 to list your tax deductions for volunteer work. Ideally, you must itemize all of your expenses to ensure an accurate calculation of the amount that you can reimburse.

If your volunteer expenses exceed $250, you must have complete documentation or proof of all your expenses to help support the volunteer work tax benefits you wish to claim.

According to the IRS’ tax tips for charity-related travel expenditures, your volunteer work must play a significant and substantial role in the nonprofit activity.

As such, if you were only a participant with minimal tasks, then you may have incurred hardly any qualifying expenses or taxable volunteer work deductions.

Don’t forget to secure an acknowledgment letter from the charity or nonprofit organization where you held your voluntary services in time before you file your returns. Surely, you can still file for a tax extension until the 15th of October if you miss the April deadline.

However, ensuring you have all the documents you need to file your taxes beforehand saves you the trouble of facing possible late penalties.

Final Thoughts

Volunteering is a rewarding activity that provides an excellent and meaningful use of your time, but it also proves that working together for a common cause can significantly change lives.

Conversely, there is no denying that volunteering is no easy feat—and this is true if you have to shoulder several expenditures to meet your cause’s objectives.

As such, it is crucial to evaluate the possible tax deductions for volunteer work that you can use to reduce the taxes you owe and manage your finances.

If you want to enrich your existing tax knowledge, you can do so through our highly informative tax blogs, namely: