Out-of-Pocket Expenses as Contributions!

Feb 5, 09 • Contributions1 Comment

Are you looking for additional charitable contributions for your tax return?  You – and so many other church members – very well might find a small bonanza here!

According to federal law, any un-reimbursed out-of-pocket expenses incurred while performing donated services may constitute a charitable contribution. The value of your donated labor or services is not deductible, BUT any un-reimbursed out-of-pocket expenses incurred while performing such donated services may constitute a charitable contribution for federal income tax purposes!

Examples of un-reimbursed out-of-pocket expenses that would relate to members who provide ministry services at your church are: 

  • Purchase of literature for religious education classes 
  • Building materials for repairing church facilities 
  • Transportation and travel expenses for mission trips, youth activities, chaperoning retreats, etc.

If un-reimbursed out-of-pocket expenses amount to more than $250, the church must issue an acknowledgement letter to the volunteer.

Also, Tax regulations stipulate that you “can claim a charitable deduction for travel expenses, necessarily incurred while away from home, performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in such travel. This applies whether the service provider pays the expenses directly or indirectly (i.e. through the church).”  The purpose of this more restrictive rule is to deny a tax deduction to persons who perform only nominal services for the benefit of the church while traveling or who are not required to render services for significant portions of a trip.

Email PSK if you want more info, or if you have other questions along this line.

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