How to Deduct Out of Pocket Charitable Contributions

Most people know that if they make a large cash contribution to a charitable organization it is tax deductible. But you also can deduct small contributions and out of pocket expenses that you incur while volunteering for a qualified charity.

Instructions

Difficulty: Moderately Easy

1. Make sure the organization to which you contribute time or money is qualified. Qualified charitable organizations can include churches, non-profit organizations, hospitals, schools and educational organizations. get a letter from the organization, verifying that your contribution is tax deductible.
2. Deduct any money that you have to spend to serve the organization as a volunteer. This includes uniforms you must wear if they are not provided by the organization. It also includes travel expenses and meals while away from home.
3. Get receipts. If you make a donation of over $250.00 the IRS will require you have a receipt. For smaller contributions, receipts are handy but not always necessary if you keep a written record of the contribution.
4. Keep good records. Record dates and the activities for which you volunteered. Keep a log of mileage if you are using your car. Be sure to record the beginning and ending mileage every time you use your car while volunteering. If you are deducting meals, note how the business you were on when you ate them.
5. Determine the fair market value anytime you donate goods to the charity. For example if you donate used clothing you must write a list of each article that you donated and then check the price of comparable used clothes to determine fair market value.

Who Can Help: