Do your plans this year include donating your valuable skills or services to charity? If traveling is part of the plan too, some travel expenses may be deductible for your business. While this can help lower your tax burden when filing next year’s return, you should use caution when listing those deductions.
Here are three things you can write off when traveling for charity:
1. Although you can’t deduct the value of your services that you donate to charity, you may be able to deduct some out-of-pocket costs associated with your services. This can include the cost of travel, meals, and lodging, but all out-of pocket costs must meet the following criteria:
- The expense must be unreimbursed; that is, the charity will not be paying you back for money spent
- The expense must be directly connected with the services you’re providing to the charity
- The expenses cannot be personal, living, or family expenses
2. Your volunteer work must be for a qualified charity. Most organizations, other than churches and government entities, must apply to the IRS for non-profit status. Ask the charity or use the Select Check tool on IRS.gov before donating your time.
3. Some travel does not qualify for tax deductions. For example, you can’t deduct your costs if a significant portion of the trip was recreational in nature (i.e. working on your tan and water skiing don’t qualify). However, you can deduct your travel expenses if you actually worked a majority of the time.
In the end, donating your time and talent can be a very rewarding experience for all parties involved. Keeping these valuable tips in mind will make filing your taxes easier and it may even encourage more volunteerism on your part. It’s a win/win!
For detailed information see Publication 526, Charitable Contributions. It’s available on IRS.gov, or by calling 800-TAX-FORM. If you have questions, contact us!
