Going on a mattress run? Consider making it tax deductible

I’m planning a few mattress runs for the next couple of months, and it suddenly hit me: What if I could make one or two of them tax deductible? If I will pay for a hotel room and travel somewhere, maybe I can save some money by deducting it from my taxes by doing some charity work at my destination!

Taxes

First things first. You cannot fly to Hawaii, work for two hours at a local food bank, spend the rest of the week there snorkeling, and call it a deductible trip. You know better than that. So here are some hard and fast rules (and some a little fuzzy) about what the IRS requirements are for your trip to be tax deductible:

You can’t have too much fun! Ok the IRS doesn’t say exactly that, but it does say that you can take a deduction “only if there is no significant element of personal pleasure, recreation, or vacation in the travel”. In other words, if you’re having too much fun on the trip, it’s probably not deductible. The main purpose of the trip must be related to you performing charitable services. Of course, actually enjoying the trip by helping others with your work is still safe, and highly fulfilling. If you work only during the morning and take the rest of the day off to sight-see, you cannot deduct your trip.

You must itemize deductions: This is a simple black and white rule. If you take the standard deduction on your tax return, then you are not eligible to deduct charitable contributions or expenses.

You must volunteer to work for a qualified organization: The organization must be tax exempt and approved by the IRS. When in doubt, you can look them up at www.irs.gov, or simply ask the organization before hand about their tax exempt status.

The work must be substantial: You can deduct the cost of your trip if you are on duty in a genuine and substantial sense throughout the trip. If you have nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. There’s a little bit of a gray area here, but use common sense. If you’re helping to build homes for veterans for 6-8 hours a day and you’re up on the roof putting shingles, clearing land or painting the house among other significant duties, you’re probably safe. If you’re just in charge of bringing coffee in the morning and sit around for a few hours until you’re then again in charge of picking up ice and sodas for lunch, then you probably can’t deduct your trip.

Deductible items: You can deduct air, rail, and bus transportation taken to arrive at your destination. Car expenses are also deductible at either the actual costs or at 14 cents per mile driven (you can use either method), but you must maintain accurate records of your trip. Tolls and parking costs are also deductible. Finally, you can also deduct lodging costs and the cost of meals.

What you cannot deduct:
– Sightseeing, tickets to shows, nightclubs, theater, and other expenses not related to the charity work being done. You also cannot deduct lodging, meals or travel expenses for your spouse or children.

– Babysitting expenses for someone to watch your children while you volunteer are not allowed.

– The value of your time and services, such as income lost while you work as an unpaid volunteer.

– The cost of meals you eat while you perform services for a qualified organization, unless it is necessary for you to be away from home overnight while performing the services.

So if you’re mattress running away from home, consider all of the above if you’re interested in finding a local qualified organization that lets you make a contribution to the community in a meaningful way, and get a tax write off in the process. It’s always a good idea to consult with your tax accountant as well. For all IRS requirements to see if you qualify, you can read Publication 526 at the IRS website for additional details and some illustrative examples.

 

Disclaimer:
The information on this website should not be used in any actual transaction without the advice and guidance of a professional tax adviser who is familiar with all the relevant facts.

Although the information contained here is presented in good faith and believed to be correct, it is general in nature and is not intended as tax advice. Furthermore, the information contained herein may not be applicable to or suitable for the individuals’ specific circumstances or needs and may require consideration of other matters.

FreeTravelGuys.com assumes no obligation to inform any person of any changes in the tax law or other factors that could affect the information contained herein. 

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

 

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