Items you will need
- IRS Publication 561
- IRS Form 8283-A
- IRS Form 8283-B
- IRS Form 1040 (with Schedules A and/or C)
With tighter budgets, many charitable organizations are having a tough time affording their contractors. Tax laws provide little incentive for volunteers to step in, as charitable services are not tax-deductible, regardless of the service rendered. Alternative options for people who want to help include performing a paid service for someone else, then donating the money to the charity; or building an item, donating it and deducting the fair market value of the item. The IRS does allow the following to count as charitable deductions:
Install new windows for a church. The market value of the windows and trim (anything tangible) can count as a deduction. Any parts or material donated by someone can be deducted.
Donate money in exchange for goods or services of lesser value and deduct the difference. For instance, if you donate $100 and receive concert tickets worth $40, you can deduct $60.
Give away items. If that old refrigerator has a fair market value of $50, then you can deduct the whole $50. Remember – it’s only the current market value that can be deducted.
Deduct the cost of travel. Even though volunteer work is not deductible, you may deduct the cost of fuel, mileage and other travel expenses for volunteering that was not reimbursed. Bus fares, cab fees, parking fees and toll costs are deductible.
Maintain records. According to the IRS, volunteers should keep a record of all qualifying charitable services and volunteer travel expenses. The records should include the name of the organization helped, date of service, distance traveled and other costs. Provide odometer readings and receipts.
Total claims of more than $500 and less than $5,000 must be accompanied by IRS Form 8283, Section A (available at IRS.gov) attached to your return. Deductions of more than $5,000 in non-cash contributions must be accompanied by Form 8283, Section B.
The best reference for more information is the IRS website, which offers a good search engine, frequently-asked questions section and availability of forms. If you’re not sure of the value of the item you’re donating, check IRS Publication 561 (available at www.IRS.gov).
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