Whether it is the devastation created by Hurricane Harvey in Texas, or other critical needs around the world, there are many opportunities to volunteer. Many churches have teams traveling for mission work or other church sponsored projects during the summer or following crisis events like Harvey. Clergy, church staff, and/or laity may have travel expenses that will help lower their taxes next year. Here are a few tips on travel while giving your services to your church:
Qualified Charity – In order to deduct your costs, volunteer work must be for a qualified charity. Churches are automatically a qualified charity.
Out of Pocket expenses – Some costs you pay to give your services may be deductible, including the cost of travel. The costs must be necessary while you are away from home giving your services, and must be unreimbursed, directly connected with the services, expenses you had only because of the services you gave, and not personal, family, or living expenses.
Genuine and Substantial Duty – Volunteer services must be real and substantial throughout the trip. You cannot deduct expenses if you only have nominal duties or no duties for significant parts of the trip.
Value of Time or Service – You can’t deduct the value of your services that you give, including income lost while you work as an unpaid volunteer.
Deductible Travel Expenses – These include air, rail or bus transportation, car expenses, lodging costs, cost of meals, taxi or other transportation to/from airport or station.
Nondeductible Travel – You can’t deduct your costs if a significant part of the trip involves recreation or a vocation.
Clergy and Church Staff may be able to deduct unreimbursed, eligible travel expenses as an employee job expense, whereas the cost of meals must be kept separate from the cost of other travel expense.
Maintain good records. Encourage your volunteers to keep copies of bills and receipts, mileage logs, or other pertinent information.
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Reminder! Third quarter estimated tax payments are due on Friday, September 15. If you prefer to make payment by check, be sure to include the pre-printed payment voucher #3 with your check. Alternatively, you can make your payment online at www.irs.gov using the IRS Direct Pay tool, or the EFTPS tax payment system (enrollment required).