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Guest post by Tobi Johnson
This article originally appeared on Tobi’s Nonprofit Management Blog.
It’s that time of year, where we (in the US) wait eagerly for our wage, income, and tax statements to arrive and we scramble to find all those receipts we need to complete our federal tax returns. Why not help your volunteers get all the deductions they have coming?
5 Ways You Can Help Volunteers with Taxes
- Educate them about what they can and cannot deduct. — For example, if they have to buy specific uniforms or equipment (i.e., tools, office supplies, etc.) that you do not reimburse them for, they can deduct the costs. They can even deduct the cost of dry cleaning their uniform, if it is not used for activities other than volunteering. They cannot, however, deduct the value of their own professional services they contribute. For the official word, check out the IRS’s Charitable Contributions publication.
- Give them a print out of the days and locations they volunteered last year. — That way they can figure their mileage to and from the volunteer site (if they left their home). These miles are deductible if you did not reimburse them for their travel.
- Make sure they have a record of their total cash donations to your organization last year. — Many volunteers donate more than once throughout the year. For each donation, you probably sent them a receipt. Why not give them a cumulative count of everything they contributed, so they are sure to count everything?
- Make sure they have a written acknowledgement of any in-kind or non-cash contributions they’ve made. — This is required by the IRS. Be sure to help them document the fair market value of their donation. The IRS’s Determining the Value of Donated Property publication may be helpful. The Salvation Army also published a Donation Value Guide online. Or, if it’s food or supplies that you didn’t reimburse them for, they can use the receipt, but it needs to be documented with an acknowledgement from your organization.
- Encourage them to claim their deductions. — Volunteers may be reluctant to claim their work on their federal tax return. It may feel self serving to them. Let them know, there’s no shame in it. It’s the law, and it’s meant to encourage charitable works for good causes. If they still feel guilty, tell them they can contribute any tax savings they realize from these deductions back to your organization. Then, it’s a win-win for everyone!
What suggestions do you have to help volunteers get the most from their tax return?
Tobi Johnson is a nonprofit and volunteer management consultant with decades of experience creating and expanding impactful programs. You can benefit from her expertise by reading her blog.