Do you plan to donate your services to charity this this year? Will you travel as part of the service? If so, some travel expenses may help lower your taxes when you file your tax return next year. Here are five tax tips you should know if you travel while giving your services to charity.
1. You can’t deduct the value of your services that you give to charity, but you may be able to deduct some out-of-pocket costs that you pay to give your services–including the cost of travel. Out-of pocket costs must be:
- unreimbursed,
- directly connected with the services,
- expenses you had only because of the services you gave, and
- not personal, living or family expenses.
2. Your volunteer work must be for a qualified charity. Most groups other than churches and governments must apply to the IRS to become qualified. Ask the group about its IRS status before you donate. You can also ask us to check the group’s status. We are happy to do so.
3. Some types of travel do not qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or a vacation.
4. You can deduct your travel expenses if your work is real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
5. Deductible travel expenses may include:
- air, rail and bus transportation,
- car expenses,
- lodging costs,
- the cost of meals, and
- taxi or other transportation costs between the airport or station and your hotel.
Please contact us if you have any questions regarding tax deductions for charitable services.