How to write off out-of-pocket expenses
Do you help your favorite charity with more than just money? Although you cannot deduct the value of your volunteer services, you are entitled to a charitable deduction of your out-of-pocket expenses. Of course, the other usual rules for charitable deductions, including the recordkeeping requirements, still apply.
What sort of expenses are we talking about? Here is a partial list that may be claimed by charitable volunteers.
Travel expenses: Generally, you can claim a deduction for travel expenses incurred away from home while performing services for a charity, as long as there is no significant element of personal pleasure, recreation or vacation in the travel.
This includes the following:
- air, rail and bus transportation;
- expenses for your vehicle;
- taxi fares and other transportation costs; and
- meals and lodging.
Because these travel expenses are not business related, they are not subject to the same limits as business expenses. For instance, you can normally deduct only 50% of the cost of business meals.
If you drive your own vehicle on behalf of a charity, you may deduct your expenses based on detailed records or use the IRS-approved flat rate. Set statutorily, the flat rate for 2017 is 14 cents per mile—the same as it has been for years.
Entertainment: If you host a fund-raising event at your home, all your unreimbursed expenses are deductible. As with travel expenses, the usual 50% limit on entertainment and meal costs does not apply to these charitable events.
Telephone expenses: Specific charges for long-distance landline calls, cellphone calls and faxes incurred for charitable purposes are deductible. In addition, you may deduct the cost of installing a separate line used strictly for charity-related calls.
Conventions: When you attend a convention as a charity’s designated representative, you may be able to deduct unreimbursed travel expenses. This includes reasonable costs of meals and lodging at the convention.
Uniforms: The initial cost and maintenance of a uniform that is not “suitable for everyday wear” is deductible if used when performing charitable services (e.g., uniforms of Boy Scout or Girl Scout troop leaders).
Underprivileged youths: You can deduct reasonable unreimbursed expenses paid to allow underprivileged youths to attend athletic events, movies or dinners if the youths are selected by a charitable organization as a means of reducing juvenile delinquency. But your own expenses are nondeductible.
Remember that detailed recordkeeping is critical – be prepared to prove your expenses in case the IRS ever challenges your deduction. Remember your KOS Tax Advisor is happy to answer any questions you have.