1. Charitable donations, including travel expenses
If you itemize deductions, you surely already know you can deduct your charitable contributions. This includes both cash contributions and goods donated to a charity.
What you might miss is that you can also deduct your travel expenses when you’re volunteering for a charity. For example, if you drive to a soup kitchen every week, you can deduct either your actual expenses or use a standard 14 cent per mile deduction.
The IRS reports these travel expenses may be deductible:
- Air, rail and bus fares
- Out-of-pocket expenses for a car
- Taxi fares
However, the government makes it clear you can’t mix volunteerism with vacations and expect to get a deduction. Here’s what the IRS says on Page 5 of Publication 526:
Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. … The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip.
In other words, you can’t write off a mission trip to the Caribbean if all you’re doing is dropping off supplies and sightseeing the rest of the time.