Are expenses incurred for volunteer work deductible? Consider if a person is planning a church mission trip to El Salvador to help build houses, and the church will not cover the airfare. The volunteer may deduct his or her properly documented travel expenses and possibly other expenses as well. Similarly, if a person serves as a volunteer board member, his or her unreimbursed travel expenses to attend meetings and other functions may be deductible. Several IRS guidelines apply for taxpayers who file an itemized Schedule A with their IRS Form 1040.
 
First, only expenses that are directly related to qualified volunteer services may be deducted. Examples of related expenses include transportation, lodging, and meals. If items such as food, books, building materials, or other tangible items are purchased for the charity, then these expenses also generally may be deductible.
 
Second, volunteers may not deduct the value of their services. Thus, if a person spends 4 hours laying brick in El Salvador, he or she may not deduct the hourly wage of the average bricklayer. However, the person may deduct the costs of supplies brought and used on behalf of the charity.
 
Third, the expenses must be unreimbursed, be reasonable, and not consist of personal expenses.
 
Fourth, the 2010 charity rate for vehicle mileage is 14¢ per mile. This is significantly lower than the business rate.
 
Fifth, no out-of-pocket expenses are deductible if there is a significant element of personal pleasure associated with them. Not even partial deductions are permitted. This element is assumed "significant" if the importance and/or duration of the duties to the charity are minor in relation to an entire trip or other service activity. This does not mean that volunteers may not enjoy their work. For a day at the beach during a week-long, labor intensive missions trip, the trip expenses should be deductible. But if the meetings are only one hour per day, the deductibility of these expenses is questionable.
 
Last, as with other tax deductions, volunteers must maintain reliable records to satisfy applicable substantiation requirements, including pertinent dates, amounts, receipts, and descriptions of the charitable purpose of out-of-pocket expenses. For unreimbursed expenses of more than $250, a volunteer also must obtain a written acknowledgment from a donee organization with a description of the expenses, incurred on behalf of the organization, a statement of whether the donee provided any goods or services in return, and a good faith estimate of any such goods or services provided in return other than intangible religious benefits.

 

This is something we have to mention again. Last October, we told you about Cardiff Lodge which offers a 90% discount to Pastors at their Luxerious Bed and Breakfast in north San Diego county. This discount is still available, but during the summer months, priority will go to regular customers. However, last-minute accommodations may still be made if there is availability. Take advantage of this fantastic deal, and don't forget to thank them.