NOTE ABOUT THIS POST'S TAX YEAR REFERENCES: Although this post was written more than a year ago and specifically cites the 2010 tax year, the Internal Revenue Code rules on volunteering are still in effect for the 2011 and 2012 tax years (and until Congress changes them) as described below. If/when they change, I'll let you know with a new post. Thanks. Kay (1/15/12)
This is the last day to make a charitable contribution if you want to deduct it on your 2010 tax return.
If you're dropping off actual goods, you have a few things to remember.
Get them to your selected charity today so the gift counts for 2010.
Make sure they are in good or better shape.
Get a receipt. This documentation requirement applies to every type of charitable gift.
If you're making a cash gift, which in the IRS' eyes includes checks and credit card donations, you can date and mail the check today or call today and pledge your gift on your credit card of choice. It doesn't matter if the check isn't cashed or you don't get the charge card statement showing the Dec. 31 donation until next year.
Giving your time: Then there's volunteering.
A lot of folks like to take time throughout the year, but especially during the holidays, to offer their services to nonprofit organizations.
They help serve Thanksgiving or Christmas meals at community kitchens. They deliver plates of food to those who are home-bound. They become Santa's helpers and drop off toys and such for children who otherwise would have nothing under the tree.
These folks deserve much praise and thanks for all their volunteer activities, now and at other times of the year.
What they don't get, however, is a tax deduction. Or at least not as much of one as they would from other types of giving.
Volunteer write-off rules: First, time spent volunteering is not deductible. For example, you're a graphic artist and you volunteer your services to create a poster for a charity's annual holiday food drive.
It took you six hours to come up with the perfect announcement. You charge your paying clients $75 an hour.
But you do not get to deduct $450 (your regular pay rate of $75 times six hours) as a gift to the charity.
However, the materials you bought to create the charity's poster are deductible if they meet some IRS guidelines:
- The costs aren't reimbursed. In this case, the charity did not pay you for the poster board, pens, etc.
- The costs are directly connected with the service you provided. You bought fuchsia pens specially to match the charity's logo.
- You incurred these expenses only because of the services you donated. Again with the pen, you never would have bought that outlandish attention-grabbing color if not for this volunteer project.
- The costs were not for personal, living or family expenses.
Don't forget driving: In many cases, you can deduct transportation costs that are part of the time you give to your favorite charity.
This could include the mileage to the art supply store to pick up the special charity poster material.
Just make sure that your driving is dedicated to your charitable purpose. You can't claim it if there is any "significant personal pleasure" involved.
That means that if on your week-long vacation you popped over to help clean up some oil from the Gulf Shore, you can't claim that mileage for the one day you spent cleaning up after BP.
But if you're one of those Santa delivery folk mentioned earlier, be sure to tally the miles you travel dropping off toys from your vehicular "sleigh."
When it comes to calculating charitable driving, the process is the same as with business mileage.
You can claim either your auto's actual costs, such as gas, maintenance and the like that are connected to the charitable activity you provide.
Or you can claim the standard mileage rate for charitable deductions. This paltry amount is 14 cents per mile. One of the reasons it's so low is that it's set by statute, not adjusted for inflation. So it's 14 cents a mile for 2010 and 2011 charity-related travel.
Whether you use the actual or standard mileage method, remember to include any toll and parking fees in your deductible mileage amount.
What's up with 14 cents? Apparently charitable works, at least this specific type of giving, don't register as much as on Congress' radar as do other tax breaks.
Every year, a Representative or Senator introduces a bill to peg this mileage amount to inflation. Perhaps 2011 will be the year that happens.
Meanwhile, we work with what we've got.
Since every cent helps when it comes not only to giving to a charity but also to reducing your taxes, be sure to track your mileage and include the value as a donation on your 2010 Form 1040 Schedule A.
And thanks for your time and good works!
- Tax moves to make today!
- Year-end giving moves, December 2010
- Charitable donations and the tax collector
- Volunteering: Can the tax man giveth, too?
(AW magazine, December 2007)
- Keep the giving going
- Midyear tax tip #8: Get charitable
- Donate and deduct credit card rebates
- Heat wave calls for cool charitable gifts
- Tax moves to make in December
- Year-end tax moves time
- Deductions demand documentation
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