As the end of the year approaches, people tend to think charitably. Likely the charitable attitude is a result of the holiday season and for some a focus towards tax planning. When giving cash or property, you should itemize your donations and obtain a receipt from the organization. However, what about the invaluable gift of your time?
You can't deduct the cost of time and effort you spend on behalf of a charity, but that doesn't mean your good deeds can't create some tax deduction.
Track your out-of-pocket costs. Here are a few ideas.
If you use your car for charity, keep a log of the mileage, parking and tolls. You can deduct 14 cents per mile. Similarly, you can deduct the cost of a plane, train or bus ride for traveling to a charitable event.
You can deduct the full costs of long-distance telephone calls, faxes and cell phone charges made on behalf of a charity.
If you host a fundraiser or board meeting, you can deduct the entire cost of the catering expenses as a charitable deduction, within the limitations for meals.
Normally, you can deduct the cost of attending a fundraising dinner. For amounts exceeding $75 obtain written documentation from the charitable organization.
A deduction is allowed for the cost of uniforms used while performing charitable services as long as the clothing isn't suitable for everyday wear; (for example, Boy Scout or Girl Scout uniforms).
If you host a foreign exchange student in your home, you can deduct up to $50 per month for each month the student attends high school.
Individually these deductions may be small, but collectively they add up. Keep good records of each cost for tax time.
Thank you to our very own John Ratcliffe for the photo used in this blog and for donating his time to the Rodman Ride for Kids. Despite a spill that landed John over his handle bars and into a ditch with his bike, John finished the 50 mile ride for charity!
Nice article, but what about donating digital property like a website, logo or video project? Is this still considered time or property?
ReplyDeleteThanks for the comment Shad and the question. I would think that digital property like a website, logo or video project could be a little of both. The time spent producing these products would be considered donated time and not deductible. If you incur any out of pocket expenses related to the projects these could be deducted as charitable expenses. Also auto miles related to any travel may be deducted using the charitable mileage rate.
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