- If you use your car for charitable driving, you may deduct out-of-pocket costs attributable to those trips. Instead of keeping track of all your actual expenses, you can use a flat rate of fourteen cents per mile (plus related parking fees and tolls) in 2011.
- Other expenses incurred while traveling on behalf of a charity, such as the cost of airfare, taxicab fares, and meals, are deductible. But there can’t be a significant element of personal pleasure, recreation, or vacation in the travel. Note that the usual 50 percent limit on meals doesn't apply here.
- If you’re required to wear special clothing while performing a charitable function – for example, a Boy or Girl Scouts uniform – you can write off the cost. Also, expenses incurred to clean and maintain special clothing are deductible as miscellaneous expenses.
- Although you can’t deduct basic telephone or cell phone charges, you may write off the cost of any long-distance calls made on behalf of the charity. In addition, you can deduct the cost of a second telephone line or fax installed in your home for charitable purposes.
- When you attend a fundraising event sponsored by a charity, you can deduct the difference between the cost and the fair market value of the benefit received. It's important to obtain written documentation from the charity for amounts above $75.
- You may deduct meals and lodging costs associated with attending a convention on behalf of charitable organization, but only if you're an official delegate to the convention. Any personal expenses incurred while you're at the convention, like a round of golf or a sightseeing tour, are nondeductible.
These out-of-pocket costs, while relatively small individually, may add up to a significant amount on a client's 2011 tax return. It's a well-deserved tax reward for their charitable endeavors.
See the whole series of Ken Berry's tax tips for the 2012 filing season
- How to Secure an 'Extra' Dependency Exemption
- Choose the 'Biggest and Best' State Tax Deduction
- Lock in Mortgage Interest Deductions for Points
- Generate Energy Credits for Clients
- Dish Out Tax Rewards to Charitable Volunteers
- A Party at Home? That's (Deductible) Entertainment!
- Spell Out Tax Rules for Business Education
- Add on Medical Expenses for a Nondependent
- How Do You Spell Tax Relief? C-a-s-u-a-l-t-y Loss
- Expand the Reach of Dependent Care Credit