Do you volunteer for a shelter or rescue? Did you know that makes you eligible for tax deductions?
If you contribute to a charitable organization, you can deduct those expenses. The list of what qualifies as a contribution is broader than you may think, so make sure you’re deducting all the expenses the IRS will give you.
What you may not know is that beyond writing a check, you can also write off any goods you donate or use exclusively in service to the charity as well. If you donate dog food, dog toys, or an item for a fundraising auction, the value of those items is deductible. For goods you donate, be sure to ask for a receipt in case you need a paper trail.
Example 1: Your dog outgrows his puppy crate. You decide to donate the crate to your favorite rescue. You may deduct the value of the crate at its fair market value for its current condition. In practical terms, it’s the amount you would expect to sell it for. You may not deduct the price you paid for the crate in its original condition.
Example 2: You volunteer in a shelter, training dogs so they are more adoptable. You purchase a no pull dog harness no pull to train dogs to walk calmly on a leash. The harness is used exclusively in your volunteer work. The cost of the harness is an eligible deduction.
2) Purchases At Fundraising Auctions
When you make a purchase at a fundraising auction, your deduction is affected by the value of the product or service you purchase. The IRS says you may deduct the amount you paid above the benefit you receive.
Example 1: Your favorite rescue is holding an auction. You win a grooming package worth $50 with a winning bid of $75. You may deduct $25 as a contribution ($75 bid - $50 value = $25 contribution).
Example 2: At the same auction, you win a dog toy valued at $20 with a winning bid of $20. Even though the $20 is going to the charity, you may not deduct it because you have not given an amount greater than the benefit you receive ($20 bid - $20 value = $0 contribution).
3) Travel Expenses
If you travel in order to volunteer, you may deduct your travel expenses so long as they are for charitable purposes and there is no significant personal benefit. Mileage is included in the definition of travel. You may deduct the actual cost of fuel used to travel for charity work or $0.14 per mile. You may also deduct the cost of meals, lodging, and any other unreimbursed expenses for charity work requiring overnight travel.
Example 1: You drive 20 miles round trip each time you volunteer at the shelter. You may deduct the actual fuel cost of your trip or $0.14 per mile, totaling $2.80 per visit to the shelter ($0.14 per mile times 20 miles round trip).
Example 2: You travel out of town to attend a regional rescue event and stay for 2 days. You spend 6 hours volunteering at the event on the first day and the next day as personal time. You may not deduct mileage or other travel expenses for the trip.
These contributions may be deducted if the organization is what the IRS refers to as a “qualified charitable organization.” Typically, this means the organization has registered as a not-for-profit charitable organization. To determine if a specific organization is a qualified charitable organization, go to www.IRS.gov/charities/ and click the link in the middle of the page that says “Search Exempt Organizations Select Check.” You may also ask the organization to see proof of its IRS tax-exempt status. This may be a letter from the IRS that states their tax ID number (also called an EIN) and that the IRS has approved their not-for-profit status.
Whether you offer your time or treasure, if you support a rescue or shelter you are eligible for tax deductions. Take this list to your accountant to get the deductions you’ve earned.
(Disclaimer: I am not an accountant or tax professional. This is not intended as financial advice. Please consult your tax professional to determine which deductions apply specifically in your situation.)
This post was written by Sonia Singh, a large dog expert who writes the Big Dog Blog at PawPosse.com. She previously was a professional fundraiser who helped non-profits and donors find mutually-beneficial ways to support charitable causes.
Are you a volunteer with a rescue or shelter? You may use this post on your organization’s site so long as you keep the 3 links intact. Want a copy in Word for easy upload to your Wordpress or other blog? Email me and I’ll send it to you along with some ways you can turn this post into more donations. Thanks!
Photo credit: 401k