A charitable deduction is allowed for the unreimbursed out-of-pocket expenses that are associated with volunteer services performed for a church or other charitable organization. Examples of these expenses include supplies for Sunday school classes, use of a personal vehicle, small equipment, food for the youth group, etc. The expenses are deductible by the volunteer as long as the volunteer maintains detailed records of the expenses and obtains the appropriate receipt in instances where the amount of the expenses exceeds $250.
As with other donations that do not represent the actual receipt of funds, the amount of the out-of-pocket expenses should not be included on the qualifying receipt that is issued to the volunteer. The receipt information should contain the following:
- Date of the receipt
- Name & address of the donor
- A description of the volunteer services
- The year the services were performed
- A statement that there were no goods or services given in exchange for the donation other than intangible religious benefits
- A thank you for all of the volunteer’s hard work and service
While the donor may present the actual receipts for his out-of-pocket expenses, it is not advisable to include these amounts on the donor’s receipt. If a church or charity includes the amount of the expenses on the donor’s receipt, then it undertakes the responsibility to verify that all of the expenses are legitimate expenses used as a part of the volunteer’s services. This places a greater verification burden on the church or charity.
This information is current as of December 2009 and is not to be construed as legal advice.
There is no specific IRS regulation that defines or lists out-of-pocket expenses that a volunteer may legitimately claim as a deduction, but the IRS has issued Publication 526 reviewing the various rules regarding charitable contributions. The publication reviews the rules regarding volunteer expenses as well as provides for examples of deductible expenses. Some examples of expenses include cost of supplies in teaching a Sunday school class; mileage driven for church events at the rate of 14 cents per mile; travel expenses to act as a chaperone on a youth trip; the cost of food to host the youth home meeting or travel expenses associated with a mission trip that does not contain a significant element of pleasure. If the time to volunteer involves a uniform, the cost of the uniform and the maintenance of the uniform are considered to be deductible.
Items never deductible are the provision of services or the provision of facilities. For example, you are a painter and you agree to paint the church offices for free. You may deduct the cost of the supplies involved; i.e., paint brushes and paint, but you may not deduct an amount for the value of your services. In regards to the provision of facilities, if you have a warehouse with extra space to allow the church to store various items, you may not deduct the foregone rent that you may have gained had you rented the space to another person or entity.
For further information on this subject see Publication 526, Charitable Contributions located at www.irs.gov.
