Is the Donation of Time to a Charity Tax Deductible?
The Internal Revenue Service allows certain deductions on individual income tax returns for donations to charities granted tax-exempt status under 501(c)(3) of the tax code. People also donate time or services to charitable organizations; however, the IRS tax codes treat those donations differently than the charitable donation of money, goods and property.
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Donation of Time
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The IRS does not allow charitable deductions for the value of time or services donated to tax-exempt charities, even if you lose wages while performing unpaid volunteer service, you are filling in for someone who is paid for performing the same work or you are donating professional services, such as serving as a nurse for a Red Cross blood drive.
Deductible Expenses
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The Internal Revenue Services allows deductions of certain out-of-pocket expenses related to the charitable donation of time or service. According to the 2010 IRS instructions for charitable donations, taxpayers may take charitable deductions for expenses that are unreimbursed, directly related to and solely because of the services and not related to family, personal or living expenses. For instance, you may deduct the expenses incurred for travel to and from a service site or the cost purchasing and cleaning uniforms required for volunteer service. You may not deduct child care expenses related to charitable service.
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Charitable Donations
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Taxpayers who itemize deductions using IRS tax form 1040 may deduct allowable contributions to tax-exempt charities. The IRS defines a charitable contribution as a voluntary gift or donation made to a qualified organization. The donor neither expects to receive, nor receives, anything of equal value in return for the donation.
Charitable Organizations
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Charities granted tax-exemption under IRS tax code section 501(c)(3) are organized and operated for one of the IRS-approved charitable purposes: religious, charitable, educational, literary, scientific, prevention of cruelty to children or animals and the promotion of national or international amateur sports competition.
Tips and Warnings
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Talk to your tax professional or call the IRS for information specific to your situation. Ensure that the organization to which you are donating your time has a valid tax-exempt status granted by the IRS. Keep records of your service and your expenses.
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