Taxpayers who volunteer their time for charitable purposes cannot deduct the fair market value of their volunteer activities on their federal tax returns. Generally, the Internal Revenue Service allows taxpayers to deduct their real estate and personal property donations to charitable organizations, but it does not allow taxpayers to deduct their time as a charitable donation. However, although volunteers cannot write off their charitable activities on their tax returns, they may be able to deduct expenses associated with their volunteering activities.
The general tax rule is that although taxpayers can deduct the value of their qualified property donations, they cannot deduct the value of their services or time spent volunteering. Taxpayers can deduct their incidental expenses incurred while providing their charitable or volunteer services, with limited exceptions. Taxpayers cannot deduct the costs they spend to obtain childcare in order to volunteer. Furthermore, the IRS does not allow volunteers to deduct the costs of their meals.
Types of Deductions
Taxpayers who volunteer as coaches can deduct their unreimbursed expenses incidental to volunteering. Unreimbursed coaching expenses include supply costs, clothing expenses and transportation costs. Clothing expenses include necessary clothes and uniforms that are not suitable for personal use and incidental dry cleaning or professional laundering costs. For example, volunteer coaches required to purchase team uniforms, including jerseys, can deduct their uniform costs, minus discounts and reimbursements. They also may deduct any unreimbursed costs of attending games, including hotel costs. Volunteers may be able to deduct their advertising expenses and the costs of providing food and drinks at fundraising events or parties.
To deduct qualified and incidental costs incurred while volunteering, the IRS requires that taxpayers volunteer their services to qualified charities or tax-exempt groups. Tax-exempt and nonprofit groups include charitable foundations, scientific groups, educational organizations, literary groups, humane societies and religious organizations. Volunteer coaches cannot deduct their volunteering incidental expenses unless the organizations in which they volunteer have obtained official status as 501(c)(3) tax-exempt organizations. Furthermore, the IRS does not allow taxpayers to deduct their volunteer expenses unless they exceed 2 percent of their adjusted gross income.
Volunteer coaches who receive any type of compensation for their services must reduce their qualified deductions by their compensation, including discounted memberships for their children to participate in league sports or discounted supply costs offered by retailers. Volunteers may deduct their transportation costs incurred while providing their volunteer services. Volunteers can use the standard mileage rates established annually by the IRS or they may deduct their actual mileage and transportation costs if they keep records and receipts of their expenses.