Pay it forward. It’s good for the soul and for those you help. But did you think that by volunteering you’d get payback as well? It might not come in the form of dollar and cents, but lending a helping hand can actually save you money by providing you with tax write offs. Here’s a few questions that might get you thinking about the volunteer work you do and if it can do more than just give you the warm fuzzies.
Do you travel to volunteer?
If so, you’re in luck. The following items can be used as deductions come tax time as long as you’ve kept a log and/or have receipts:
- Tolls, parking fees, or money spent on Uber, train, or city bus fares (keep receipts)
- Log the number of miles you drive while volunteering
- If your volunteer efforts require a lengthy trip you can also include airfare, living accommodations and the cost of meals.
Do you wear a uniform?
If you’re required to wear jeans and t-shirt that doesn’t hit the mark, because you can wear it for everyday use. However, if you’re required to wear a hard hat, or some type or uniform that you wouldn’t just wear to work in the yard or to the mall, then it meets the requirement.
What do you spend money on when you volunteer?
Do you make calls asking for donations or to set up board meetings for your organization? If so you can count the minutes on the phone towards a deduction. But if your plan provides unlimited minutes, no deduction can be made because it wasn’t an added expense. Other ways that you might spend money to volunteer might include mailing out packages of information, creating fliers, or purchasing space at a job fair or bazaar to get the word out about your volunteer opportunity. This one is a little bit more detailed, but if you’re wondering whether it counts or not, make a note and then ask your accountant about it the next time you meet.
Do you make donations?
If you have clothing, furniture, toys or other household items that are still good but that you don’t use anymore, consider donating them. Charitable thrift stores are glad to get used goods and you can use organizing your home and closet as a way to procure a tax writeoff. There’s no need to have original receipts for any of the items, the tax deduction is calculated off of the current value of the items. Just remember to ask for a receipt when you drop your used items off at your donation site.
Making a cash donation is just as effective for both those in need and your bottom line. All you need is a canceled check, bank statement, or a receipt from the receiving charity. If you’re attending a charity event, make sure that any benefits you receive (dinner, entertainment, golf tournament etc.) are deducted from the total amount you donated.
Not everything can be counted as a deduction. Here are a few to keep in mind:
- Not all nonprofit organizations are created equal. They may do good work, but they also have to meet the qualifications of the IRS for it to be a deduction for you. Double check the the charity before you donate by searching for them on the IRS website.
- Giving blood is a great way to help, but there’s no tax deduction here – you just get to feel good about saving a life.
- If you purchase supplies to do volunteer work, the cost of those items can be counted as a deduction. The number of hours you spent volunteering (or the wages you’d have made if you’d put those hours in at work) don’t count.
Have questions about your volunteer efforts and if they qualify? Want to talk to an accounting professional about your taxes, possible writeoffs and keeping your business in tip top shape?
Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.