How to Track Volunteer Hours for Taxes

A surprising tax fact catches many new volunteers off guard: the IRS does not let you deduct the value of your time, no matter how skilled you are. A retired CPA who donates 200 hours a year doing nonprofit bookkeeping cannot claim a single dollar for the work itself. The reason, in plain English, is that the IRS only allows deductions for money or property you actually gave away — and your hours are neither.

What you can deduct are the out-of-pocket costs of volunteering. The most common one is mileage to and from the volunteer site, claimed at a rate of 14 cents per mile (this rate has not changed since 1998 and is set by Congress, not the IRS). If you drive 50 miles a week to deliver Meals on Wheels, that adds up to about $364 a year. Parking fees and tolls on volunteer trips also count.

Other expenses you can claim include uniforms required by the nonprofit (and not suitable for everyday wear), supplies you bought yourself for the role (poster board, art materials, ingredients for a fundraiser dinner), and travel costs if the volunteer work requires an overnight trip — like a church mission trip or a Habitat for Humanity build in another state. Meals during local volunteer work are not deductible, but meals on overnight trips are.

To claim any of this, the nonprofit must be a qualified 501(c)(3) charity. Most well-known organizations are: Salvation Army, Red Cross, your church, your local food bank. You can check any nonprofit's status at irs.gov by clicking the Tax Exempt Organization Search tool. Political campaigns and most homeowner associations are not qualified, even if they call themselves nonprofits.

Keep a simple log of every trip. The IRS does not require a fancy app — a paper notebook in the glove box works. Write the date, the nonprofit's name, the round-trip miles, and the purpose. At tax time, total the miles and multiply by 14 cents.