As Tax Day draws ever closer, I thought I’d write a bit more about tax deductions… I’ve written in the past about common income tax deductions, as well as commonly missed tax deductions. This time, I thought I’d tackle some of the lesser known charity-related tax deductions.
Mileage Related to Volunteering
While volunteering does not, in and of itself, produce any tax deductions, your travel expenses for getting to and from the volunteer location are deductible. And if you use your car once you get there (e.g., to deliver food to the needy), that’s deductible, as well. You can either claim the standard deduction of $0.14/mile or the actual cost of your gas. You can also include parking fees and/or tolls.
Out-of-Pocket Expenses
If you incur non-reimbursed expenses on behalf of a qualified organization, these expenses can be deducted as charitable contributions. Moreover, if your volunteer work requires that you wear a uniform, the costs of that clothing (as well as keeping it clean) are deductible.
Gifts of Appreciated Property
Donating appreciated assets (such as shares of stock) provides a dual benefit in that you avoid paying the capital gains taxes that you would’ve incurred upon the sale of these assets and you get to deduct the full value of the assets. Just be careful… If you’ve owned the asset less than a year then you can only deduct what you paid for it.
Just keep in mind that if your gift is worth $250 or more, you have to get a receipt from the organization to which you donated in order to substantiate your deduction. Also keep in mind that mileage-related deduction usually need to be documented. As such, you might not be able to take advantage of everything on this list for 2007. However, you should be in good shape going forward if you start keeping track now.
And here are some examples of the sorts of charity-related things that you can’t deduct:
» Contributions to an individual, regardless of their level of need.
» Contributions to a group created to lobby for law changes.
» The value of your time or services (such as lost wages while volunteering)
» Personal expenses (such as the cost of meals while volunteering)
» Appraisal fees for determining the value of donated property
I use the site http://deductiontraq.net for tracking all my donations throughout the year. You can look up the fair market value of items, track cash/non-cash/volunteering expenses and upload images also.
My gosh! I had no idea about these. Last weekend I drove to the far side of the valley to do a 5K for charity. Dang! I’m gunna start keeping track of mileage for those little frolics. Thanks to Mapquest, it’s pretty easy to do, even if you forget to look at the odometer.
I had no idea you could deduct milage for volunteering. That might help me out this year. Thanks!