Qualified Organization

• Before you can deduct any expenses, you must ensure that the charity organization at which you volunteer is an IRS-qualified organization. A qualified organization is any non-profit entity that is organized under United States law, including the District of Columbia and U.S. possessions. The structure of the organization must be a community chest, corporation, trust, fund or foundation. The organization's mission can only be to promote religious, educational, literary, humanitarian, scientific or charitable causes. Typical qualified organizations include non-profit hospitals, churches and fire departments.
  
  

Deductible Car Expenses

• If you use a personal vehicle to provide volunteering services, you can deduct the costs that directly relate to those activities. To qualify, the only reason for incurring the expense must be due to the charitable work you perform. Deductible expenses include the actual cost of gasoline, oil, tolls and parking. As an alternative to maintaining records of the actual car expense, you can calculate the deduction using the IRS standard mileage rate. However, both methodologies require you to prove that you actually drove the miles you are deducting and to keep a record of the organization to which those miles driven relate and the dates of your volunteering. You can deduct the miles you drive to and from the location where you volunteer and the miles you drive as part of the services you provide.
  
  

Reducing the Deduction

• If the charitable organization provides you with a gift or any other benefit in appreciation for your services, you must reduce the car expense deduction by the value of the gift. However, token gifts that you receive with little or no value do not reduce the deductible portion of car expenses. To exclude the gift's value from the reduction amount, you must receive a written acknowledgment from the organization that confirms that the value is negligible and expressly states that you should take the deduction without any reductions for it.
  
  

Taking the Deduction

• The earliest tax year for which you can deduct the car expenses is the year you actually provide the services and incur the expenses. You include the amount of deductible car expenses you calculate in itemized deductions on the Schedule A attachment to IRS Form 1040. If you are unable to take the full deduction in the year you incur the expense due to limitations, you can use the excess amounts in any of the future five tax years. Expenses you do not deduct within that time become worthless for tax purposes.