23 Mar Can I deduct my charity work on my tax return?
Q. I am the treasurer of a small 501(c)3 foundation that works with a village in Vietnam. All the monies donated are used for the school and village. We have very little overhead because we all volunteer. Each year the foundation’s president and I go to the village to assess our progress and identify the needs of the people. We pay our own way. Can I deduct these expenses on my tax return?
A. We’d like to commend you for your charitable work.
And yes, depending on the specific circumstances, you may find a tax benefit.
The IRS does allow for the deduction of expenses incurred in relation to charitable activities within certain guidelines, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.
To take the deductions, the work you do has to be for a qualified charity, which yours is as a 501(c)3 charity, he said.
“You can only deduct out-of-pocket expenses to the extent that they are directly related to the services you are providing are not reimbursed,” he said. “The expenses must have been incurred only because of the services you are providing.”
Also, the expenses cannot be personal, living or family expenses, he said.
And, the charity work you are providing must be real and substantial throughout the trip. You can’t deduct expenses if your duties are nominal or insignificant, he said.
You can deduct the following expenses: Air, rail and bus transportation, car expenses, lodging costs, the cost of meals and taxi or other transportation costs between an airport or station and hotel, Gallo said.
“You can not deduct for the value of your time or if a significant part of your trip is for vacation or recreation purposes,” he said.
Based on your description and the above guidelines, it seems you would be entitled to the deduction, Gallo said, noting that you must itemize deductions on your federal tax return to take advantage of these deductions.
Email your questions to .
This story was originally published on March 23, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.