Millions of individuals volunteer to help raise funds or perform other tasks on behalf of animal-rescue groups and other charitable organizations. When the annual reckoning with the IRS rolls around, their willingness to help out entitles them to write-offs for unreimbursed expenses incurred while they do volunteer work for rescue groups like the Humane Society of the U.S and the ASPCA.
Only out-of-pocket outlays count. At tax time, animal-rescue volunteers can claim charitable deductions for many kinds of outlays. Qualifying expenditures include: animal feed, medicines, cat litter, litter boxes, pet dishes, cleaning supplies, garbage bags, paper towels, laundry detergent and dish detergent, animal bedding, animal toys such as those that help with behavior modification and well-being, fees paid to veterinarians and behavior trainers and food for volunteers building temporary shelters for pets evacuated from flood zones in hurricanes. IRS examiners have hissy fits when they scrutinize such expenses and allow them only if rescuers are able to show that they incur them to further the groups' missions, such as foster care for stray animals.
A U.S. Tax Court decision in 2011 is good news for volunteers. Jan Van Dusen of Oakland used her home to care for over 70 abandoned cats. She claimed about $12,000 in care expenses as charitable contributions on her return for 2004. The IRS at first denied her claim, arguing in part that use of her home meant that the write-offs in issue were nondeductible personal expenses. But the cat rescuer persuaded the court that she rendered services for a charitable organization known as Fix Our Ferals. Jonathan Lovvorn, chief counsel of the Humane Society of the U. S., says the decision establishes that you can claim deductions for rescued animals cared for in your home, provided you can distinguish between expenses for them and expenses for your personal pets.
IRS audits. To be on the safe side, keep separate receipts. Also, ask the rescue group for a written statement that authorizes you to keep animals in your home.
Travel. An often missed outlay begins the moment that you leave your home. Your allowable deductions include travel expenses to and from animal shelters, veterinarians, committee meetings, fundraising events, and so on. If you travel to and from your volunteer work by planes, trains, buses, or taxis, just make sure to keep track of your fares and claim them as travel expenses.
If you use your own auto, you have two options for handling the expenses: The first option is to deduct the actual cost of gas and oil. Unlike write-offs for business driving, you can't claim depreciation because that isn't an actual cash payment. Nor can you claim insurance and repairs unless you use the car only for charitable driving or the repairs are directly attributable to that use.
The second option is to make the paperwork simpler by claiming a standard mileage rate. The standard rate is 14 cents a mile for tax year 2014, unchanged since 1997, as set by law.
Tip. Whether you use the mileage allowance or drive a gas guzzler and claim actual costs, remember to deduct parking fees and bridge or highway tolls, as well.
Example. In the course of your charitable work this year, you drive 1,000 miles and shell out $50 for parking charges. Your allowable deduction is $190 (1,000 miles times 14 cents equals $140, plus $50 parking). Or, if you pay more for gas and oil than the mileage allowance, you can deduct actual costs, plus parking.
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Julian Block writes and practices law in Larchmont, N.Y. and was formerly with the IRS as a special agent (criminal investigator) and an attorney. He is frequently quoted in the New York Times, the Wall Street Journal, and the Washington Post, and has been cited as: "a leading tax professional" (New York Times); "an accomplished writer on taxes" (Wall Street Journal); and "an authority on tax planning" (Financial Planning Magazine). This article is excerpted from "Julian Block's Tax Deductible Travel and Moving Expenses," available as a Kindle at Amazon.com and as a print copy at julianblocktaxexpert.com