If you travel on behalf of a nonprofit organization to do volunteer work and have unreimbursed expenses, you can write off those expenses on your tax return.
Naturally there are rules revolving around this type of write off. You have to be able to itemize deductions rather than take the standard deduction in order to enjoy the benefits. Before attempting to take any deduction related to travel, meals, and entertainment make sure you can defend it if you find yourself in an audit situation. After all, anything that smacks of fun will be closely scrutinized. So in addition to your receipts, make sure you have keep any information describing the trip, photos or any other documentation that will prove the trip was indeed a charitable excursion.
So here’s the drill when expensing charitable travel:
First of all, it must be on behalf of a qualified organization. Ask the charity about its tax exempt status or use the IRS Select Check Tool to confirm qualification. If a group is not a qualified charity, that doesn’t mean it’s not a worthwhile program, it does mean your unreimbursed expenses will not be deductible.
Secondly, the main reason of the trip must be for charitable purposes. So if you are a board member for the Boys and Girls Club and vacation for two weeks in Bali and decide one day to stop by the province’s version of the Boys and Girls Club to analyze operations and dine with the director, you will not be able to write off the trip. Of course, you are allowed to enjoy your time when travel for charity, but the element of personal pleasure, vacation or recreation cannot be significant.
You are not allowed to write off the value of your time or services. If you contribute property however, you may take a charitable contribution for that. So let’s say, you were take a trip on behalf of a nonprofit to teach reading to small children. You spend five hours a day working with the children and provide reading materials purchased with your own money. The value of the time you spend is not deductible but you can write off the cost of the books. You may want to take a few snapshots of the children reading the books to accompany the receipt to further substantiate the deduction.
Your work must be real and substantial throughout the trip. You can’t take the write off if you only have nominal duties or no duties at all for significant parts of the trip.
If you qualify, the expenses you may write off include
- Transportation: air, rail, bus, taxi, shuttle, rental cars, etc.
- Hotels and lodging
- Mileage rate for use of personal vehicle is $.14/mile
For more information, check IRS Publication 526 Charitable Contributions.
Bonnie Lee is an Enrolled Agent admitted to practice and representing taxpayers in all 50 states at all levels within the Internal Revenue Service. She is the owner of Taxpertise in Sonoma, Calif., and the author of Entrepreneur Press book, “Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn't Want You to Know.” Her new e-book Taxpertise for the Creative Mind Murder, Mayem, Romance, Comedy and Tax Tips for Artists of all Kinds is available at all major booksellers. Follow Bonnie Lee on Twitter at BLTaxpertise and at Facebook.