You’ve maybe heard of “voluntourism” in which you travel to a different area as part of a research team or volunteer crew. Alternative Spring Break programs are becoming more popular, too, as more and more students would rather be of service during spring break than be hung over. Here ‘s a look at the tax rules surrounding this type of volunteer work.
IRS Publication 526 offers a more comprehensive take on the situation, but in a nutshell, it’s all in the nature and purpose of your trip:
Scenario 1: You decide to travel to a hurricane relief zone to assist with re-building and relief efforts. You spend a week handing out supplies, preparing meals, and playing with kids of displaced families at the relief center. You pay out of pocket to travel to the hurricane relief zone.
You can generally deduct your travel expenses, if you are working on behalf of a charitable organization such as the Red Cross or similar. You can also deduct the cost of meals and lodging. Remember, though, the burden of proof is on you to demonstrate that the trip was strictly for volunteer work and not a vacation.
Scenario 2: You sign up for a trip to Costa Rica that includes 3 days working on an archeological dig and two days for leisure activities.
You won’t be able to deduct the expenses attached to the archaeological dig due to your two days to vacation on your own for personal enjoyment.
Scenario 3: You take a group of youth camping as part of a charitable organization. You’re in charge of overseeing their activities, as well as setting up and breaking camp at the end of the trip. You are also responsible for transportation to and from camp.
If this trip is attached to a charitable youth organization such as scouting or other youth-oriented group, you are allowed to deduct travel and food expenses for this trip.
However…in each of the three scenarios, you must be on duty “in a genuine and substantial sense throughout the trip.” In other words, if your volunteer stint was limited to clearing breakfast dishes in the morning and prepping dinner at night while hanging out during the day, the IRS could disallow your trip-related expenses.
If your volunteer stint required you to be on duty, as in the case of the camping trip in Scenario 3, you’re in luck: you can deduct those trip-related expenses.
Since these programs are fairly new, the IRS is going to scrutinize related expenses more closely than that check you write to the Boys and Girls Club last year. Be sure to keep all of your related receipts, logs, and other paperwork that can prove you were on duty for a substantial period of time.
It would be a good idea to get a letter from one of the officers of the charity, explaining the extent of your role.This will come in especially handy if you performed your volunteer work out of town.
As always, volunteer expenses must be attached to a qualified 501 (c) (3) organization in order to meet IRS guidelines.
Volunteer work, whether performed at home or across the continent, benefits both you and the charity. Make sure you can claim your related expenses by fully understanding the IRS guidelines governing volunteer expenses. When in doubt, consult a tax advisor prior to tax day.You can also consult IRS Publication 526 for more information.