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Consumer Confidential: You can deduct charitable donations. Why no tax benefit for volunteering?

David Lazarus, Los Angeles Times on

Published in Business News

Which is to say, you have no economic incentive to get off the couch. Your only motivation to volunteer is a personal sense of well-being and maybe some good karma.

Some tax experts argue that's a sufficient perk for volunteering.

"Happiness," said Paul Schervish, director of the Center on Wealth and Philanthropy at Boston College. "That is the reward."

He added: "People don't want to be paid for this. Otherwise they'd get a job."

Other experts say the tax benefit is that you're volunteering instead of working, thus reducing your income, thus lowering your tax bill. Also, you're not being taxed on the value of the time or service you're donating.

"There's no tax on your output," said Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center.

 

But that doesn't answer the core question: Why do financial donors get a straightforward deduction whereas people who contribute time or labor get no tax benefit?

Anthony Burke, a spokesman for the Internal Revenue Service, said the tax agency doesn't make the rules. "We administer the law as written," he said.

And volunteer work isn't completely ignored by the law. You can deduct the cost of driving to and from the nonprofit where you volunteer.

But even that tax benefit is miserly compared to other standard mileage deductions. According to the IRS, you can deduct 14 cents for each mile you drive related to your charitable activities.

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