Charitable Mileage
When most taxpayers think of charitable deductions, they think of the receipts collected from the charities they may have donated clothes and other personal items. Many people hope their church or religious organization kept better records than they did of any monies donated. Studies show those at either the high end or low end of the income distribution tend to give a higher percentage of their income as contributions than those in the middle. In broad strokes, those with income between $100,000 and $200,000 contribute, on average, 2.6 percent of their income, which is lower compared to those with income either below $100,000 (3.6 percent) or above $200,000 (3.1 percent). However, individuals from higher income categories are far more likely to itemize than individuals with lower income. [1]
There are many factors that deter the "middle to low income" taxpayers from maximizing their itemized deductions, but none more than lack of information. For example, most people do not realize they are able to deduct out-of-pocket expenses related to services provided to a qualified organization per Internal Revenue Service Publication 526. One of those unreimbursed out of pocket expenses related to charitable services would be actual car expenses or charitable mileage. You can deduct as a charitable contribution any unreimbursed out of pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You can't deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. It is usually easier, for record keeping purposes, to deduct the standard mileage rate of 14 cents a mile to figure your contribution versus the actual expenses. You can also deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. You must keep reliable written records of your car expenses. Feel free to schedule a consultation with MNB Services to discuss proper record keeping to maximize all of your deductions.
[1] Analysis performed by NCCS, based on data drawn from the 2011 IRS Statistics of Income file, “Individual Complete Report (Publication 1304),”Table 2.1, available at http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income.