Can I deduct the value of my volunteer service to a nonprofit?

Volunteering for a nonprofit organization can provide meaningful support to charities. But, many volunteers are surprised to learn that the IRS generally does not allow individuals to deduct the monetary value of their volunteer service to a nonprofit on their individual income tax returns. But volunteers may be able to deduct for certain volunteer expenses.

This article explains what volunteers can and cannot deduct, common examples of deductible volunteer expenses, and the IRS rules that apply to charitable volunteer activities.

1. No monetary deduction for volunteer time and service.

In general, volunteers cannot deduct the monetary value of their personal services or time donated to a charitable organization.

The general rule is that charitable contribution deductions apply to donations of money or property — not the value of services provided.

  • Example: An individual volunteers three hours of her time in the mail room at a nonprofit organization. Normally, the nonprofit would pay a staff person for this service at a rate of $10 per hour. Great work…but the individual cannot claim a monetary deduction of $30 for this volunteer service.
  • Example: An attorney gives 5 hours of pro bono work to a nonprofit she supports. Her legal rate is $200/hour. Great work…but she cannot deduct that $1,000 as a monetary deduction on her taxes.

Again, the IRS does not allow you to assign a value to your time for charitable donation purposes. But certain expenses related to the charitable work may be claimed.

2. Certain expenses can be deducted related to volunteer service.

Although volunteer time itself is generally nondeductible, some unreimbursed out-of-pocket expenses related to volunteer work may qualify as charitable deductions. Generally, the expenses must:

  • Not have been reimbursed by the tax-exempt organization
  • Be directly tied to the volunteer services provided to the nonprofit
  • Be incurred only because of the volunteer work the volunteer donated
  • Not be personal, living, or family expenses

The rules can be very fact-specific, so volunteers should maintain records supporting any claimed deductions.

Two common examples:

  • Transportation Costs. Volunteers may generally deduct certain transportation costs incurred while getting to and from the place you volunteer.  For example, volunteers may deduct parking fees, gas/mileage, public transit fees. Instead of calculating actual vehicle expenses, many volunteers use the IRS charitable mileage rate, which is set by federal law and may change periodically.
  • Uniforms. If the organization you volunteer for requires a uniform, the cost of purchasing and cleaning your uniform can be deducted if the organization is a qualified institution (churches, nonprofit charitable groups, nonprofit hospitals, etc.) and the uniform is not suitable for everyday use.
    • Example: A nonprofit hospital requires volunteers to wear scrubs. If the volunteers purchase them, pays to clean them, and they are not suitable for every day use, then this is an appropriate expense.
    • Example: A nonprofit theater requires volunteers to wear black pants and a black shirt while volunteering as an usher. This would not be a deductible expense since the items are suitable for everyday use.

Other possible deductions that you may have from volunteer work may include supplies you purchase to be used in volunteer work, such as stamps and stationery. Certain expenses tied to hosting a fundraiser or event for the organization may be deductible, as well.

IRS Publication 526  lists a few more examples that illustrate this concept.

3. Must be for qualified organization.

Your volunteer-related costs will be deductible only if made to a qualified nonprofit, tax-exempt organization. Usually, this is for IRS Section 501(c)(3) tax-exempt entities.

You can find out if the group is a qualified 501(c)(3) organization several ways:

  • Ask the group for a copy of their 501(c)(3) determination letter and letter of affirmation.
  • Check IRS Publication 78, a list of organizations qualified to receive tax-deductible donations.

Volunteer Deductions Records to Keep

Volunteers should keep documentation showing any charitable deductions that they claim on tax returns. This might include receipts, bank statements, mileage logs, an acknowledgment from the charity.

Related

Year-End Giving: How Do My Donations Affect My Taxes?

Year-End Giving- How to make your donation count.

Need Help?

The Cullinane Law Group works exclusively with the nonprofit sector. We set up and maintain strong and legally compliant nonprofits that have solid bases for long-term success. We provide risk management and offer practical solutions for sound governance. We help nonprofits, foundations, religious organizations, and social entrepreneurs throughout the United States who seek to create positive change.