My wife is a Girl Scouts Leader. Is all of her time and contributions to the troop tax deductible? If so, how?
Taxgirl says:
Okay, the bad news first: the value of your time spent volunteering for charitable organizations is never deductible. Ever.
But there is good news! Out of pocket expenses relating to volunteering for charitable organizations are deductible. To qualify, those expenses must be: (1) unreimbursed; (2) directly connected with the services; (3) expenses you had only because of the services you gave; and (4) not personal, living, or family expenses.
The most obvious example of out of pocket expenses relating to providing services for a charitable organization is the cost of transportation. You can either deduct the actual costs of gas, etc., related to your services or you can claim the standard mileage rate (currently 14 cents a mile for charitable deductions) to figure your contribution. No matter which method you use (mileage or actual), you can still deduct parking fees and tolls.
You can also claim travel expenses while you are away from home performing services for a charitable organization, assuming that the expenses are related to the services and not for personal use (such as a vacation). Travel expenses would include air, rail, and bus transportation (as well as expenses for your car); taxi fares or other costs of transportation between the airport or station and your hotel; the cost of lodging and the cost of meals.
If you buy uniforms or other related clothing, etc., as part of your charitable service – and are not reimbursed by the organization – you can deduct those costs. Be aware, however, that the general rule on those are that the uniforms must be worn while volunteering and are otherwise not suitable for everyday use (so the cool tee shirt that you wear occasionally to the mall doesn’t count).
Any other supplies or prizes that you buy to be used in the performance of your services would likewise be deductible.
So, no to the value of your personal services but yes to those related expenses. Keep good records when you travel or buy things for your troop and you should be okay.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
The end of the year is almost upon us and you know what that means: it’s your last chance to make your tax deductible charitable gift! Yeah, we tax people tend to think about the end of the year in slightly different ways…
This is a tough year for a lot of folks. Charities are reporting that donations are down and needs are up – not the best combination, as you can imagine. With this in mind, I wanted to do something to raise awareness for the great work that’s being done by a number of charitable organizations. At the same time, I wanted encourage you to make your charitable gifts by the end of the tax year (this is, after all, a tax blog).
So here’s what I’m doing: 12 Days of Charitable Giving!
I’m asking you, the reader, to post in the comments below about the charity that most deserves a boost this year – it needs to be one that you have supported financially over the past year or that you plan to support before the December 31 year end. At the very least, you’ll need to include the name of the charity, the city where the charity is located and why you support the charity (personal stories would be great). A link to the web site and the best way to make a donation would be terrific: the more information that you can provide, the better.
The charity must be a bona fide 501(c)(3) organization, meaning that deductions are tax deductible to the donor. Examples include churches, schools, libraries and purely public charities like the Red Cross. If you’re not sure about the tax status of the organization, you can check it out here. Additionally, most charitable organizations will post evidence of tax-exempt status on their web site.
Convince me why your favorite organization is a deserving charity. But you don’t have to convince just me: I’m reaching out to 12 bloggers and companies to evaluate the comments and choose the most compelling. Those bloggers and companies will commit to making a donation of at least $25 to the charity mentioned in the comments that they find most deserving. Even better, the winning choices will be featured, one per day, for 12 days in December on taxgirl.
The hope is that one donation (yours) turns into two (a match from the judges) or more (more readers), a big win for the charitable organization. The benefit to you? A tax deduction and some warm fuzzies, knowing that you’ve done something good in the world. Remember, the power of one can be enormous.
So, um, what are you waiting for? Start posting in the comments section below!
This week, supporters of Proposition 8, which would ban gay marriage in California, released an ad, pictured above. The ad claims that under current law, gay marriage would be promoted in public schools and warned that churches which opposed same-sex unions would lose their tax exempt status. Richard Peterson, a law professor at Pepperdine University School of Law, appears in the ad, citing a newspaper article alluding to the loss of tax exempt status for those churches that oppose same sex marriage.
I never, ever, ever said anything about if churches do not perform same-sex marriages that you’ll lose your tax-exempt status.
DeKoven, who has never been contacted by the Yes on 8 campaign or Professor Peterson, authored an op-ed piece for the July 3 edition of the Gay & Lesbian Times entitled “Anti-Gay Clergy Should Fear Backlash.” Despite the title, DeKoven was not arguing that there might be tax consequences for those churches who oppose gay marriage; instead, he was arguing that it was not fair to allow tax deductions for donations to churches which are political but not allow tax deductions for donations to secular groups that are overtly political. That argument makes sense.
Issue advocacy on its face does not put tax exempt status at risk: it depends on the facts and circumstances. For example, the president of the Church of Latter Day Saints (LDS) issuance of a letter “from the pulpit” as was indicated in DeKoven’s piece, urging members to donate “means and time” to pass Proposition 8 is likely just a matter of issue advocacy. And to be clear, tax-exempt charitable organizations may take positions on public policy issues, even for those issues on which candidates have taken differing positions. However, encouraging voters to get behind an issue needs to be interpreted as simply that and not as intervention in a particular candidate’s campaign.
Even if a message from the charitable organization does not expressly encourage a vote for or against a specific candidate, there is a risk of violating the ban on political campaigning by a charitable group if the message appears to favor or oppose a candidate. That might include, for example, adding photos or statements from candidates in issue advocacy campaigns; directing voters to a particular candidate’s website; and literature that touts one candidate’s record on an issue. But simply advocating an issue is not a violation of the prohibition against politicking.
There is a fine line – and it’s clear to me that DeKoven was not implying that the line had been crossed in this circumstance. However, Professor Peterson and the folks at Yes to 8 apparently saw this as an opportunity to frighten taxpayers into believing that they couldn’t speak out against gay marriage under the current law. That’s just plain nonsense. It is short-sighted and narrow-minded of Professor Peterson to participate in such an ad campaign without arming himself with the facts – and if he had armed himself with the facts and moved ahead, shame on him.
Professor Peterson has not responded publicly to the criticisms against him. In the meantime, Pepperdine University School of Law has asked the Yes on 8 campaign to remove the Pepperdine affiliation from the ads; the campaign has not agreed to do so.
Funny. If the law actually were as Peterson has attempted to imply, he would have put Pepperdine’s tax exempt charitable status at risk for what appears to be taking a very public stance on a political issue… Only, Professor, that’s not the case, now is it?
I’m sure that you’ve seen a number of signs and ads that encourage you to donate your vehicle to charity. In our area, they’re plastered all over the place… Do they actually work?
Not so much anymore. In 2004, Congress changed the rules regarding car donations for charity. The rules more or less limited the deduction that you could claim to $500 or the lesser of the car’s fair market value (good) or the actual proceeds from the sale of the car (not so good). The latter has seriously impacted both the number and value of used car donations.
How much of an impact did charities see? The accounting firm of Grant Thornton reports that between tax year 2004 and 2005, the number of car donations valued at more than $500 dropped by approximately 67%. The total value of donations fell more than 80%.
What happened?
The changes in the rules may have made it more appealing for some folks to sell rather than wait to find out the charitable donation value. With the lack of a large deduction as a “sure thing” – the numbers of donations dropped. And the requirement to substantiate the donation by using the value of the sale clearly forced folks to, um, maybe not *fudge* on their returns (not that I’m saying it happened). So a number of lovely cars (perhaps like the one pictured above) that were being donated to charity for “fair market value” were revalued – producing a very different result than before.
But there was good news: despite the reduction in charitable car donations, Americans actually increased the value of overall charitable donations in that same time by a factor of 10%. The study did not specify whether that increase was largely cash or goods. I’m guessing it was heavily stocks and appreciated assets – but that’s just me.
But it does make me wonder… If you donated to charity last year, was it mostly goods, mostly cash or a combination of the two?
