Good news for booster club volunteers who drive: Congress will consider a bill to increase mileage deduction for all volunteers who help a recognized 501(c)(3). A modest deduction is already available for mileage accrued in volunteer related activities, such as driving to events or transporting students as part of a carpool. If the increase passes, it will level the playing field for non-profits.
The current system for deductions privileges business over non-profits. According to the IRS, charitable deductions for driving have stayed fixed at 14 cents per mile, while business deductions for driving have climbed past 55 cents. In the words of Tom Petri (R-WI), who introduced the Charitable Driving Tax Relief Act, “[the current rate] is inconsistent and unfair […]
If someone is delivering Meals-On-Wheels or taking someone to the hospital or making any trip as part of a charity, they should be treated the same as they would if they were working for profit.” After all, the whole spirit of these deductions is to reduce barriers to creating value—what’s the point of snubbing non-profits?
If treated like for-profit employees by the IRS, booster club volunteers could save hundreds of dollars per year. Volunteering for a booster club often involves driving for carpools, performances, and meetings. Those miles can add up. Consider a volunteer who drives 350 miles a year (that’s a few meetings, and one in-state competition). At 14 cents per mile, that volunteer would only be eligible for a $49 tax deduction. Depending on your tax bracket*, that’s not even worth the trouble of documenting the mileage. But if the bill passes, that same volunteer would get 55 cents per miles, or a $192 deduction. That’s well worth the effort of saving a few receipts and cuts the financial cost of volunteering as a driver, a much needed service for booster clubs. (Track your volunteer hours as well–many big companies such as Best Buy, Verizon, or State Farm will actually reward your club for every hour that you report.)
Speaking of the trouble of saving receipts, the bill will even reduce paperwork for volunteers, according to an article by AdvisorOne.
But don’t break out the champagne just yet—Charitable Driving Tax Relief Act was introduced in 2008, 2009, and 2010 and never made it up for a vote. You can follow the progress of the bill at congress.gov. If you want to give this bill a chance to pass, share your support with individual members of the Committee on Ways and Means, more specifically the subcommittee on Select Revenue Measures—they’re going to review the Charitable Driving Tax Relief Act before it’s put up for a vote.
Congressional Subcommittee (of the Committee on Ways and Means) on Select Revenue Measures:
- Rep. Pat Tiberi, OH (Chairman)
- Rep. Erik Paulsen, MN
- Rep. Kenny Marchant, TX
- Rep. Jim Gerlach, PA
- Rep. Aaron Schock, IL
- Rep. Tom Reed, NY
- Rep. Todd Young, IN
- Rep. Richard E. Neal, MA
- Rep. John Larson, CT
- Rep. Allyson Schwartz, PA
- Rep. Linda Sánchez, CA
*Of course deductions don’t mean direct cash back. It depends on your tax bracket. For example, if you are in a 15% marginal tax bracket, it would look something like this:
350 miles x $0.14/mile = $49.00 deduction
$49.00 deduction x 15% tax bracket = $7.35 tax refund
350 miles x $0.55/mile = $192.50 deduction
$192.50 deduction x 15% tax bracket = $28.88 tax refund
Photo credit: “Dollar Bill Snail” by Benjamin Reed