Tax Tip: Dish Out Tax Rewards to Charitable Volunteers
by AccountingWEB on
By Ken Berry
This is the fifth article in our series of tax return tips for 2011 returns.
Do you have clients who work just as hard for a nonprofit organization as they do at their regular jobs? Although taxpayers can't deduct the value of their "blood, sweat, and tears," they can still write off certain expenses that aren't reimbursed as charitable contributions.
What sort of expenses are we talking about? The expansive list for volunteers includes the following:
- 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.
You may like these other stories...
The tax-filing season got off to a slow start because the IRS said it needed more time to gear up for this year’s returns. But now the pace has picked up considerably.About 40 percent of the returns expected to be...
Tax preparers have completed a lot of returns since the season began and will complete a lot more before April 15 – but that's just the beginning for many accountants and their clients. In the weeks and months that...
To read more articles by Eva Rosenberg, MBA, EA, click here and check out the Talk to TaxMama archive.Once upon a time, tax storefronts and offices in primarily non-English-speaking communities were able to make a very nice...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.