People who travel to, or on behalf of, a charitable organization as a volunteer may be able to deduct the travel expenses as charitable contributions. Unreimbursed travel expenses are deductible only if there is no significant element of personal pleasure, recreation, or vacation in the travel. In determining whether there is a significant element of personal pleasure, the relevant question is how much time the taxpayer spends in service to the organization and how much time the taxpayer spends in recreation or in free time.
What Travel Expenses are Deductible?
Deductible travel expenses include:
- Air, rail, and bus transportation
- Auto expenses. The use of an automobile for charitable purposes is deductible at the standard mileage rate of 14 cents per mile. Alternatively, taxpayers may deduct the cost of gas and oil directly related to the use of the auto in providing services to a charitable organization
- Reasonable food (subject to the 50% meal limitation) and lodging costs necessarily incurred while away from home
- Transportation costs between the airport or station and the hotel (or place where the taxpayer is staying)
There is no deduction for the value of the volunteer’s time or services.
Example: Tim is on the board of directors of a charity. There is a seminar in Florida on fundraising. Tim is sent by the charity to attend the seminar. He is covering the travel, lodging, and meal costs. If the seminar lasts a couple hours a day for three days, and Tim spends most of the day hanging out at Disney World, it is highly likely that the travel contains a significant element of personal pleasure and the travel, lodging, and meal expenses are not deductible.
Example 2: Same as above except that the seminar is 8 hours a day for three days. Tim goes out for dinner and entertainment each night. In this example, most of the day is spent at the seminar and even though Tim enjoys some recreation at night, it is unlikely that this amount of recreation would constitute a significant element of personal pleasure. Tim would be able to deduct the expenses.
Unreimbursed volunteer expenses have the same substantiation requirements that apply to cash contributions. To prove a gift was made, a donor must produce one of the following:
- A cancelled check
- A receipt showing the name of the charity, the contribution date, and the contribution amount
A contribution of $250 or more must, in addition to meeting one of the two above requirements, be supported by a contemporaneous written acknowledgement by the charity. It is critical for clients to have all required receipts before filing their return, even if this means extending the return. Since the charity is not directly receiving funds it may be unaware that the volunteer incurred the expenses, volunteers have to be proactive in requesting an acknowledgement that they incurred unreimbursed expenses while volunteering.
Buzzkill Disclaimer: This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.