Special Tax Relief Program for Disaster Related Donations
As the holiday season quickly approaches, many of us feel encouraged to donate during this season. This year, in the wake of the recent devastation caused by natural disasters, holiday giving and volunteering is expected to rise.
The IRS recently announced a new special leave-based donation program to encourage taxpayers to help victims of the recent hurricanes. Under the new program, if you are an employee, you can choose not to take your vacation, sick, or personal leave in exchange for cash payments your employer makes to charitable organizations providing relief to hurricane victims. Under the special relief, the donated leave will not be included in your income.
If you haven’t been able to volunteer yet this year, you still have time to take advantage of the new special leave-based donation program to help hurricane victims. Outside of this special donation program, if you volunteer to help other charitable organizations, you may be able to take a tax deduction for travel, lodging, and supplies purchased related to your volunteer work.
Specifically, if you are traveling to volunteer this holiday season, don’t forget you may be able to deduct mileage at 14 cents per mile, actual expenses to drive your car, parking fees, tolls, and even airfare if your flight is directly related to volunteering. Also, if for some reason you need to purchase a uniform for your volunteer work, the costs of purchasing and maintaining your uniform is also tax deductible. This rule applies to actual uniforms, however, not to clothes that you wear every day.
Holiday giving can be a great way to help those in need this time of year, and you also may be able to receive a tax benefit. Track your charitable donations and your mileage from volunteering and then use the information when preparing your taxes at tax-time.