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Charitable Volunteers: Step Forward to Claim Deductions - How to write off your unreimbursed expenses

Unfortunately, you cannot deduct the value of the time and effort you devote to charitable causes. However, if you incur expenses in the course of your charitable activities, you may be able to deduct your out-of-pocket costs on your personal tax return. Consider the following:

Local transportation: If you drive your car to charitable events or meetings, you may deduct your expenses—gas, oil, repairs, etc.—attributable to those trips. Instead of keeping track of actual expenses, you can deduct a flat rate of 14 cents per mile in 2008 (plus tolls and parking fees). Similarly, rail, bus or taxicab fares are also tax-deductible.

Long-distance travel: You may also deduct your long-distance travel expenses on behalf of charity. This includes airfare and meals while you are away from home. But note that you cannot deduct these costs if there is a “significant element” of personal pleasure, recreation or vacation in the travel.

Charitable conventions: You may deduct the costs of attending a charitable convention if you are an official delegate of a qualified charitable organization. However, even if you qualify for deductions, any personal expenses you incur while you are away from home—such as sightseeing or recreational activities—are nondeductible.

Uniforms: If you are required to wear a uniform or some other special clothing while you perform charitable activities, you can deduct the cost of the clothing. But the clothing cannot be suitable for everyday wear. In addition, the cost of cleaning the uniform is deductible as a miscellaneous expense. (Miscellaneous deductions are limited to the excess of 2% of your adjusted gross income.)

Telephones and faxes: You are entitled to write off the cost of long-distance telephone calls made on behalf of a charity. Similar rules apply to cell phone usage. Even better: If you install a second telephone line or fax in the home just for charitable purposes, the entire cost—not just your long-distance charges—is deductible.

Home entertainment: If you host a party or dinner for charitable purposes at home, all of your expenses are deductible. There is no 50% limit on entertainment and meal expenses under the charitable donation rules.

Charitable functions: When you attend a function for a charity, such as a fundraising dinner, you can deduct the cost minus the fair-market value (FMV) of the benefit received. Example: You and your spouse pay $100 a plate each for a dinner with an FMV of $35. Thus, you can deduct a total of $130 ($200 – $70). Note that you must obtain written documentation for contributions exceeding $75.

The IRS tends to scrutinize these types of deductions. Make sure you keep the records necessary to back up your claims.

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