The Nonprofit FAQ

Can volunteers and board members deduct out-of-pocket expenses?

Early in 2001, Joseph D. Cargioli asked: Are out of pocket travel and living expenses to attend annual or semi-annual national board meetings tax deductible for board members of nonprofit 501(c)((3) organizations? Are their out of pocket expenses for performing board business such as postage, mailing materials or use of personal vehicles tax deductible? Answer from the editor: The regulations permit volunteers (including, of course, board members who volunteer their time), to deduct from their personal income taxes (on Schedule A) reasonable expenses incurred in their work for a recognized 501(c)(3). The website at http://web.archive.org/web/20010604194807/serviceleader.org/advice/taxes.html ("Tax Credits for Volunteering Costs") gives more information. You may also want to consult the IRS publication on charitable contributions; it is available online (as a .pdf file) at http://www.irs.gov/pub/irs-pdf/p526.pdf. Note that it will be necessary to have good documentation of expenses connected with traveling to resort locations. If the expenses are over $250 for activity, a contemporaneous receipt from the organization is necessary to substantiate the charitable deduction. Expenses incurred by a spouse who is not involved in the program are never deductible. The IRS sets a per mile rate for deduction of personal auto expenses while doing volunteer work. For 2005, this rate is 14¢ per mile. Note that the allowable rate for a deduction for business use of a personal auto is higher (The difference has been explained by saying that only the out-of-pocket cost is deductible for volunteers, but the allowance for business use includes depreciation of the vehicle.) The IRS lists the rates for the current year at http://www.irs.gov/formspubs/article/0,,id=109876,00.html#stan_mile_2004 While on the subject of things that aren't deductible, it's worth recalling that the time a person spends working as a volunteer cannot be deducted (see http://www.nonprofits.org/npofaq/11/22.html) and that when you donate something you yourself made you can only deduct the cost of the materials even if the object has commercial counterparts with higher prices. Posted 4/11/01; revised with updated web addresses 6/3/03, 2/11/05 -- PB