What Is The Charitable Mileage Deduction And How To Claim It?

What is a charitable mileage deduction?

A charitable mileage tax deduction is a form of tax relief you can get for using your vehicle while volunteering. It was designed to encourage philanthropy and reward people who actively support charitable initiatives. Note that you can only take this deduction if you’re itemizing all your deductions for the year. Add up all your itemized deductions for the year and compare them to the standard deduction to see which makes more sense.

The Internal Revenue Service provides precise rules on how the tax deduction can be claimed. The IRS regulations refer to:

• What documentation is required to claim a tax deduction
• How to report mileage deduction on your tax return
• What type of travel is considered deductible

Eligibility criteria for charitable mileage deduction

Before applying for a tax deduction or even counting your charitable miles, you should ensure you will be eligible to claim that deduction. 

Check if the charity you volunteer for is eligible

If you’re volunteering for a state or federal organization or a church, you can skip this part as they’re automatically qualified. In any other case, you can check the eligibility on the IRS website. 

The variety of charitable organizations that qualify is quite extensive, so you should be good nonetheless. According to the Internal Revenue Service, qualified nonprofits include:

1. Foundations, cooperations, and trusts created in the United States exclusively for charity, education, science, helping children, or animal welfare. 
2. War veterans’ organizations.
3. Non-profit volunteer fire departments. 
4. Civil defense organizations.

Under certain conditions, even certain domestic fraternal societies and cemetery companies can be eligible. 

Precise mileage tracking and recordkeeping

Diligent mileage tracking and record-keeping either using a manual mileage log or a dedicated app like MileIQ, is crucial to claiming an accurate deduction. 

The first option can be viable if you make just a few trips a year. If you make quite a decent number of miles for charity each year, you should consider using an app to make your life much easier. 

Regardless of your choice, you should consider the IRS regulations that specify what exactly can be considered deductible charity-related travel. The mileage has to be directly linked to volunteer activities, such as transporting puppies to a vet, shopping for cat food, and driving other volunteers to an animal shelter. 

In addition to that, it has to be you who performs volunteer work. You can’t claim a charitable mileage tax deduction if you only drive and pick up your children from an animal shelter. 

Calculating charitable mileage

After confirming your eligibility for the charitable mileage deduction and thoroughly recording all your miles throughout the year, you should be ready to calculate your deduction.

You’ll need the charitable mileage rate ($0.14 per mile) and the number of miles you’ve driven as a volunteer in a tax year. 

Let’s say you’ve worked really hard for multiple charities and reached 5,000 miles in your travels. The calculation for your tax deduction would look like this:

$0,14 * 5,000 = $700

As you can see, the tax deduction still isn’t too impressive even with significant mileage.

That’s why there’s an alternative option to get tax deductions for charity-related travel using the actual expenses method. It requires you to keep detailed records of all the expenses related to your vehicle, including fuel, repairs, and insurance, in addition to odometer records. These will help you ensure that your deduction claim is accurate and provide necessary documentation in case of an IRS audit.

Claiming the charitable mileage deduction

Getting tax deduction for charity-related travel is fairly easy and can be summed up in four steps. 

1. Track your eligible miles. Your records should include the date, purpose, starting and ending locations, and the number of miles driven. You can write this information in a spreadsheet or simplify the process to just a few clicks with MileIQ. 
2. Fill in Line 12 in Schedule A. Multiply your total miles driven for charity by a standard mileage rate of $0,14. Write the result in Line 12.
3. Keep all your records. Hold on to all relevant documentation in case of an IRS audit. 

It isn’t too complicated, but a certain level of diligence comes a long way. By keeping track of all your eligible miles, you maximize your tax deduction and stay completely safe in case of an IRS audit. 

The most common mistakes you should avoid include:

• Claiming a deduction for personal use
• Misplacing crucial documentation
• Using incorrect mileage rates
• Forgetting to track or record mileage
• Inconsistent recordkeeping

Most of them are easy to avoid if you’re careful enough, but using an app to automate mileage tracking can help make the process even simpler.

Medical mileage deduction

Besides charity-related travel, you can claim a medical tax deduction for trips to hospitals, doctors, including therapy. The standard mileage rate for medical travel in 2024 is 21 cents per mile. Whether you require regular appointments, one-time visits, or treatments possible only far away, you can claim a deduction for the miles driven for qualifying medical purposes.

This tax relief method was introduced to help people minimize the financial burden of necessary medical travel. So, if you’re in this unfortunate situation, we encourage you to check if you’re eligible to lower your taxable income. 

Just like with charitable travel, the process requires you to track your mileage and keep records of all your medical-related travels. 

Which charity are you going to support this year?

While the standard mileage rate for charity-related travel is quite low, especially compared to the business mileage rate, it can still be worth taking advantage of it, especially if you make a lot of charitable trips throughout the year.

Lastly, while the process might seem complicated, with a clear understanding and careful execution, it can be relatively straightforward. Make sure to stay updated with the latest IRS guidelines and rates to make the most of these deductions.