The IRS recently posted certain tips about how to leverage your summer travel with charitable activity. If you travel as part of your charitable service, some travel expenses may help lower your taxes when you file your tax return next year. Below are five tax tips:
1. You cannot deduct the value of your services that you give to charity. But you may be able to deduct some out-of-pocket costs you pay to give your services. This can include the cost of travel. All out-of pocket costs must be:
- 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 use the Exempt Organization Select Check Tool to check the group’s status.
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. The IRS provides Publication 526 – Charitable Contributions to help you with the travel rules.
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.
Charitable work while traveling and maximizing your tax deductions does not need to be mutually exclusive, but you should check with your tax advisor before planning your trip to make sure you understand the rules.