Deducting travel expenses for charitable mission work

[venacontracta]

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!

[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-c...

[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 

[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-expen......

[Opus 17]

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@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-expen......

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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.

[Bsch4477]

@Opus 17 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.  

Good catch. I always learn something from you.

[TaxMomof2boys]

Hello, I hope someone can help. I have this exact same scenario.  The medical mission trip was taken in 1/2024.  The trip was paid for in 2023.  However, when I enter the info in the donation/charity section, it asks for travel dates.  When I enter 1/2024, it flags as an error and will not let me continue.  How can I get the program to allow me to deduct the expenses paid for 2023 for the trip that was in 2024?  Thank you so much in advance!

[Vanessa A]

You will need to tell TurboTax that the year you took the trip is the date you purchased the tickets.  As a cash basis taxpayer, donations are deductible in the year they are made as itemized expenses. 

Itemized expenses include mortgage interest, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss, and charitable donations.  Your health insurance and all medical expenses are only deductible for the amount that is over 7.5% of your AGI.  This means if your AGI is $50,000, then the amount that is over $3,750 is deductible.  

Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your insurance premium payments. 

The 2023 Standard Deductions are as follows:

• Married Filing Joint (MFJ)              $27,700
• Married Filing Separate (MFS)      $13,850
• Head of Household (HOH)             $20,800 
• Single                                                     $13,850                                

Blind and MFJ or MFS add $1,500

Single or HOH if blind add $1,850

Standard versus Itemized Deduction

(Edited 3/14/2024 @ 10:49AM PST) @TaxMomof2boys

[TaxMomof2boys]

Okay, thanks so much Vanessa.  I didn't realize the other posted replies on the initial thread were incorrect.  (They state to deduct the travel costs in the year they were actually paid.)

[Bsch4477]

See page 14. 
https://www.irs.gov/pub/irs-pdf/p526.pdf

Contributions should be deducted in the year they are paid. 

[Opus 17]

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@Bsch4477 wrote:

See page 14. 
https://www.irs.gov/pub/irs-pdf/p526.pdf

Contributions should be deducted in the year they are paid. 

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If Turbotax will not accept a future date for charitable travel, I think the argument that is being made is that "service" to the charity does not occur until the trip occurs, even if some expenses are pre-paid.  

[Vanessa A]

Opus17 brings up a good point. If the tickets were purchased in 2023 in your own name, then you had full use and control of them. That means you could have decided to not use them for the charitable service. In a situation like that, it's really a 2024 noncash donation (of the tickets for benefit of the charity) since that is when the charity had use of, or benefited from, your travel.

Assuming these facts are correct, you would wait until 2024 to take the deduction.

• You purchased the tickets in your own name. This means you are the ONLY ones who had a right to use those tickets for any purpose you choose to use them for. The charity had no rights in 2023. So it was not a 2023 donation.
• The "value" of the tickets should be claimed as a noncash contribution in 2024  because the tickets were in your name and not used for charitable reasons until 2024

@TaxMomof2boys