Approximately 85 percent of all nonprofits have no paid staff, according to the Internal Revenue Service. This makes volunteers essential for many charitable organizations. When you volunteer to contribute your time to an organization’s programs, you might also charity travel expenses while serving as a volunteer.
Depending on the organization’s accounting policies and financial situation, you could be eligible to receive reimbursement of your travel expenses. So, it helps to know where to deduct travel expenses for charity. Typically, your reimbursement might require that you complete a W-9 form if your reimbursements exceed limits set by the IRS.
Volunteer Travel Expense Claim Guidelines
The IRS allows eligible charities to claim reimbursements to its volunteers for travel expenses at the standard mileage rate of 14 cents per mile or for actual expenses for gas and other operating expenses. So, when claiming volunteer mileage on taxes, that’s what you can use.
The organization can also reimburse you for parking, tolls and similar costs. When you decide to volunteer for a charitable organization, you might be asked to complete internal and tax forms that your charity uses for reporting your travel expense claims to the IRS.
One purpose of these forms is to provide a record that the organization uses when it does its accounting for its own expenses on its tax form. An organization that has the means to provide a higher travel reimbursement can reimburse you at a higher mileage rate than the maximum set for volunteer travel by the IRS.
In these cases, the organization is likely to require that you provide them with a W-9 form for travel reimbursement because the IRS considers your total annual amount of reimbursements at rates greater than 14 cents per mile as miscellaneous income.
Volunteer Travel Expense Recordkeeping
Regardless of which method of reimbursement an organization uses, you and the charity need to keep records that show the purpose of your volunteer travel. A simple log for beginning and ending mileage on each date that you travel for your charity is often enough to meet this requirement.
It’s always useful for your expense reimbursement record to have a notation about the activity or event that required your travel. You should keep copies of reimbursed receipts for parking and toll expenses.
1099 Form for Travel Reimbursements
If your reimbursed travel expenses for the year total $600 or more, it’s likely that you will receive a 1099 form that reports your reimbursements to the IRS. Your organization will also send you and the IRS a 1099 if they reimburse your mileage for volunteer travel at a rate higher than 14 cents per mile.
Receiving this 1099 form from your charity does not necessarily mean that you will pay taxes on your reimbursement. Your tax preparer will help you figure out how this income affects your taxes.
Deductions for Unreimbursed Travel Expenses
In some instances, volunteers prefer to claim their charitable travel expenses as a deduction on the taxes instead of being reimbursed by the organization. If you want to take this option, you’ll decrease the amount the organization pays out on travel reimbursements. However, when you think your total deduction will be more than $250 in one year, the organization must give you a statement with details about your volunteer service.
Choose whether to take a deduction using the standard volunteer rate for mileage, along with parking and tolls, or your actual expenses. Consult the volunteer travel deduction regulations in the IRS Publication 526 (2020), Charitable Contributions to figure out your allowable deductions. Take note of records that you need to keep when claiming a percentage of your actual vehicle expenses as unreimbursed volunteer travel deductions.
Carol Luther has published feature articles in print magazines, ghostwritten blogs, and produced digital content since 2007. She has published personal finance and small business articles for the Houston Chronicle, Mahalo, the Nest, USA Today, Wahm, and Zacks. Carol has designed, implemented and managed multi-year, multimillion-dollar domestic and international projects services for higher education, nonprofits, and small to medium businesses for more than 20 years.