Question

Deducting travel expenses for charitable mission work

Forum|Forum|3 years ago
February 13, 2023
2 replies
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I'm a doctor and did a foreign medical mission trip run through a 501c3 nonprofit. I've looked through Turbotax and IRS Pub 526 and understand that my travel expenses for this trip are likely deductible but have a few questions.

Do I take the deduction in the year I incurred the expense or the year of the trip? ie book flights in 2022 for trip in early 2023, pay for hotel at checkout in 2023 - must the expenses from this trip be split across my 2022 and 2023 returns?

If I paid for an upgraded seat on my flight, any issue with deducting that as well as the base airfare?

If I had meals on the trip where I do not have an itemized receipt but can document the expense via a credit card charge on my statement, is that enough, or would claiming that be looking for trouble?

Thanks for your help!

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Bsch4477

If travel is for a recognized charity those expenses are deductible in the year paid. Expenses should be ordinary and necessary so your upgrade would be problematic. See here for more information.
https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/deducting-travel-expenses-when-doing-charitable-work-8835/?amp=1

DaveF1006

Yes and please review this Turbo Tax presentation on what volunteer expenses are deductible. You will deduct the expenses in the year these were paid since IRS bases these deductions on a cash year basis. The hotel expense would be reported in your 2023 return since it was paid in 2023.

As far as the upgraded flight, I see no provision that prohibit you from claiming an expense for an upgraded flight. Credit card receipts can be used to substantiate expenses if a receipt is not available.

This IRS powerpoint presentation is also a good reference tool to use since it addresses expenses that volunteers can claim.

@venacontracta

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B

Bsch4477

See this post from TurboTax expert. While the post relates to business expense the same principle applies to charitable deductions. The IRS might have a problem with the cost of an upgrade which is a personal expense.

https://ttlc.intuit.com/community/business-taxes/discussion/can-i-deduct-unreimbursed-business-expenses-like-upgrades-on-airlines-to-business-class-extra-cost/00/403597#:~:text=No%2C%20you%20cannot%20deduct%20the,as%20a%20business%20deduction...

O

Opus 17

@Bsch4477 wrote:

See this post from TurboTax expert. While the post relates to business expense the same principle applies to charitable deductions. The IRS might have a problem with the cost of an upgrade which is a personal expense.

https://ttlc.intuit.com/community/business-taxes/discussion/can-i-deduct-unreimbursed-business-expenses-like-upgrades-on-airlines-to-business-class-extra-cost/00/403597#:~:text=No%2C%20you%20cannot%20deduct%20the,as%20a%20business%20deduction...

I disagree. Publication 526 specifically says "Because these travel expenses aren't business-related, they aren't subject to the same limits as business-related expenses." There is no requirement that the travel be economical or not luxurious.

However, there is a requirement that you be "on duty in a genuine and substantial sense" for the entire trip." and there are several examples given.

What I was really looking for in pub 526 was a requirement that the travel must be domestic only, foreign travel not allowed. But it doesn't say that, so either it is a very old rule that was removed, or it's my imagination. The charity itself must be registered in the US, Mexico, Canada or Israel.

Generally you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a qualified organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the qualified organization and the organization pays for your travel expenses.

The deduction for travel expenses won't be denied simply because you enjoy providing services to the qualified 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.