Your Time is Valuable: donation of time for a nonprofit agency can be assigned a monetary value.

As charitable individuals, our humility sometimes goes a little too far. Do not underestimate yourself!

In our Junior Seminar class last week, someone said that their volunteer hours couldn’t be assigned a value and consequently weren’t tax deductible.  Our instructor enlightened us on this matter.  He said there was definitely a definitive monetary value that was tax deductible as a charitable donation. He then provided us with links to very helpful information regarding this issue.

Donation of time to a nonprofit organization can be assigned a monetary value and you may deduct your donation on your tax return.  “The estimated dollar value of volunteer time is $21.36 per hour for 2010, according to the Independent Sector, a coalition of charities, foundations, corporations, and individuals that publishes research important to the nonprofit sector” (http://www.grantspace.org).

~ You may also benefit from tax deductions of these expenses if incurred during your volunteership:

  • Transportation – If driving your own car, you may decide between a standard mileage deduction of 14 cents or deduct the actual expense of gas and oil. You may also add in parking and tolls. If traveling via other means, you may deduct travel fare.
  • Volunteers may deduct airfare and other transport, accommodations, and meals, when performing volunteer services away from home.
  • Certain miscellaneous expenses may also be deducted. Fees for printing and postage when expended on behalf of the volunteer endeavor is deductible.  Dog treats used to train dogs at a shelter, or art supplies used to teach a Sunday school are two good examples.
  • The cost of uniforms and laundering of uniforms used for the volunteer position are also tax deductible.

In order to claim these deduction, they must be:

  •  Itemized on your tax return
  • From a qualified, IRS-recognized charity (the charity must have official legal nonprofit certification)
  • Can be claimed only as expenses not previously reimbursed by the organization
  • They cannot be personal expenses incurred while volunteering (for example, lunch for a friend who kept you company on the volunteer assignment)
  • You must have accurate written records of the expense (save ALL RECEIPTS!).

Here’s a link to Publication 526, Charitable Contributions for 2011 Returns by the Internal Revenue Service, which explains how to claim deductions for your charitable contributions.

Although you should alert volunteers to these potential tax deductions, don’t get into the business of giving personalized tax advice. Instead, suggest that volunteers talk to a tax professional, use a tax preparation software program, read IRS Publication 526, Charitable Contributions (at www.irs.gov, click on publications), or read a good primer on tax deductions, such as Easy Ways to Lower Your Taxes, by Stephen Fishman (www.Nolo.com).

References:

Internal Revenue Service. (2011).  Publication 526, charitable contributions for 2011 returns.

Bray, I. Nolo.com.  Remind nonprofit volunteers about tax deductions for expenses.

Grant Space Knowledge Base. (2010). What is the monetary value of volunteer time?

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~ by The Gallery Goddess on March 27, 2012.

One Response to “Your Time is Valuable: donation of time for a nonprofit agency can be assigned a monetary value.”

  1. Reblogged this on The Gallery Goddess and commented:

    I wanted to reblog this article, relevant as it is duriing Tax Time.

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