Volunteers play a vital role in every non-profit organization, from fundraising, to meeting the needs of clients, to administrative functions. In addition to giving their time, volunteers often accrue substantial expenses, which can have a negative affect on volunteer retention and recruitment. Many non-profits promote tax deductions to entice new donors, but does your organization use volunteer-related tax deductions to recruit and retain volunteers?Volunteer Expenses

The following outlines IRS deduction guidelines for both volunteers and non-profits:

What can be deducted by a volunteer?

  • Transportation expenses. Volunteers can deduct 14 cents per mile for travel to events like board meetings, fundraising events, etc. Volunteers can also deduct parking fees and tolls incurred for these events.
  • If you ask volunteers to purchase a uniform — for example, an apron identifying them as a hospital helper — they can deduct both the purchase price and any cleaning/upkeep costs, as long as the uniform isn’t suitable for everyday use, and they are required to wear it when volunteering.
  • Out of pocket expenses. Volunteers may deduct other expenses they incur during the course of their volunteer work. For example, board members might deduct unreimbursed postage and copying charges associated with preparing for meetings. Volunteers at an animal shelter can deduct the treats that they’re asked to provide in order to help train dogs during walks.
    • To be deductible, the amounts must be:
      • Directly connected with the services.
      • Expenses incurred only because of the services given to the non-profit.
      • Not personal, living, or family expenses.

What cannot be deducted by a volunteer?

  • Value of volunteer time or services.
  • Personal expenses, such as the cost of meals, unless it is necessary for the volunteer to be away from home overnight while performing the services. Another example would be payments for childcare even if the volunteer would be unable to volunteer without childcare.
  • Travel expenses if there is a significant element of personal pleasure, recreation, or vacation in the travel. If a volunteer has only nominal duties, or if for significant parts of the trip doesn’t have any duties, travel expenses cannot be deducted.

What information do volunteers need to track?

  • Accurate records of deductible expenses related to volunteer service that were not reimbursed.
  • Mileage related to volunteer service.
  • For any expense of $250 or greater:
    • Statement from the organization describing the volunteer services.
    • Statement from the organization describing whether it provided goods or services to the volunteer as reimbursement.
    • Description and a good faith estimate of the value of any goods or services provided as reimbursement.
    • Statement that the only benefit received by the volunteer was an intangible benefit, if applicable.

What volunteer information do non-profits need to track?

  • Number of volunteers – for disclosure on Form 990 and Form 990-EZ annual tax returns.
  • Number of volunteer hours – for funders and donors that want to know what resources your nonprofit already receives and from whom. Not only does this raise awareness of the organization but it can also help secure grants.

For more detailed information about volunteer deductions:

Please contact the professionals at Gilliam Bell Moser if you have any questions.

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