UPDATED FOR 2017 with 2016 tax season info
When Baden-Powell said “Be Prepared,” I’m pretty sure he wasn’t talking about income tax returns.
But still, there’s no better advice than that two-word phrase during tax time.
Scouters who heeded the Scout Motto last year remembered to track and document their Boy Scouts of America-related expenses. And now, they know that they can include those expenses if they plan to itemize their deductions.
But what if you didn’t know that BSA expenses were deductible? Or what if your “filing system” is really your glove compartment that’s stuffed with gas receipts and crumpled-up napkins? And what qualifies as an eligible expense, anyway?
Your fellow Scouters and I are here to help. Along with other Scout leaders on Facebook, I’ve collected some tips to help you track and deduct your BSA-related expenses.
And with the April 18, 2017, deadline approaching fast, there’s no better time than now to get started.
Before we go any further, let me tell you that I’m no CPA, and I can’t help you file your return (for the best advice, find a professional, use tax-preparation software, or check out the IRS Web site).
What I do know is this: You give your time and money to the Scouting program, and Uncle Sam wants to give you credit—at least for the money part.
Much more after the jump.
General facts you need to know
Further clarification for this section comes from the Taxwise Giving newsletter (November 2016 edition).
- On IRS Form 1040, “2016 Instructions for Schedule A” (PDF link), the Boy Scouts of America is listed by name on page A-9 as a “qualified charitable organization,” so BSA expenses are eligible.
- Three types of contributions can be deducted:
- Cash/check donations
- Property donations
- “Out-of-pocket expenses you paid to do volunteer work”
- Some types of relevant contributions cannot be deducted:
- The value of your time
- Scouting dues or membership fees
- IRS Publication 526 has lots more info (thanks, William)
Easy enough, right? Scouters will mainly be concerned with that third type of eligible deductions, “out-of-pocket expenses you paid to do volunteer work.”
Some items that you purchase to benefit your unit can be deducted, provided your unit didn’t reimburse you for them. You’ll want to check with your tax professional to be sure, but Scouters have told me they deduct uniforms, merit badge pamphlets, den meeting activity kits, Wood Badge course fees and much more — again, as long as their pack or troop didn’t reimburse them.
However, there’s one expense that I’m certain you can deduct: the cost of driving to and from BSA events.
How to include driving expenses
Included in the third category is driving to or from a BSA event. Here’s what the IRS says about mileage:
- First, you’re eligible to deduct the cost of driving to and from the volunteer work, which would include most BSA activities.
- You have two options here:
- You can take the actual cost of gas and oil, OR
- You can take 14 cents a mile (note: the 2016 rate for volunteer work mileage remains at 14 cents a mile)
- You can deduct parking and tolls, so add that to the amount you claim under either method above.
- As a reminder, you cannot deduct any expenses, mileage included, that were repaid to you by your unit, district, council or anyone else.
- You also cannot deduct insurance or depreciation on the car.
Traveling as a volunteer
If you travel as a volunteer and must be away from home overnight, reasonable payments for meals and lodgings, as well as your transportation costs (previous section), are deductible.
This is where it gets tricky. You can’t deduct travel expenses if there’s a “significant element of personal pleasure, recreation or vacation.” But enjoying your volunteer time doesn’t rule out a deduction.
For example, if you’re an on-duty troop leader who takes children on a camping trip, you may deduct those travel expenses even if you had a good time.
Next, there’s the tricky part of “gifts from which you receive benefit.” Let’s say, for example, that you attend your council’s annual dinner. Can you deduct that expense? Sort of.
Here’s what the IRS says: “If you made a gift and received a benefit in return, such as food, entertainment, or merchandise, you can generally only deduct the amount that is more than the value of the benefit.”
So if tickets for the council dinner were $75 and the value of the dinner was $35, you can only deduct $40.
Or if you paid $110 for a $100 gift card at a silent auction, you can only deduct $10.
Also, you’ll want to consult a tax professional or the IRS site for individual gifts of $250 or more. There are special rules that apply to those larger gifts.
With all of these expenses, no matter how small, it’s a good idea to keep receipts. Speaking of …
Ten tips for keeping track of it all
Now let’s hear from your fellow Scouters. I asked Scouting magazine’s Facebook friends to weigh in on this issue. Here are 10 tips they gave:
- Theresa W. keeps a “notebook in the car for tracking mileage! Man, it adds up faster than you think!”
- “I update an Excel Spreadsheet with costs, and a folder for receipts,” says Jeff B. “I print out the Excel table when I do my taxes.”
- Jamie D. also has a high-tech approach: “I use Mint.com to track all our expenses. I set up a category just for Scouts.”
- So does Tom H.: “I have a program called NeatReceipts that comes with a scanner. I use it for my expense reports for work. Just drop the receipts in the scanner then catagorize them. Set up a group for Scouting and everything is there at tax time.”
- But Michelle H. prefers the low-tech method: “We have a calendar and a folder (calendar stays in the folder) to keep track of everything!”
- Patricia L. makes it easy on her accountant: “I keep a file and drop my charitable receipts in it all year. Our accountant appreciated copies of online maps that we used for driving directions. Date, purpose, and mileage all in one place.”
- Julus P. doesn’t itemize, but he might start some day. “Scouting is not for profit, and not a hobby. Granted, it feels like a hobby sometimes! I don’t keep track of all these things but really should!”
- For Mark F., it’s not worth the trouble. “I don’t keep up with it. I enjoy being a Cubmaster and camp promotions chair, and so far, it’s cheaper than going to NASCAR races and cheaper than maintaining my boat and related gear I use for fishing!”
- Shawna R. keeps track of mileage, but not for every trip: “I don’t keep track of mileage for going to the store to pick up Scout items, even if it’s the only thing I’m going to the store for.” That’s probably a good call.
- And finally, please remember to heed the advice of Ann O.: “Check with your tax person on what you can deduct. It wasn’t as straightforward as I thought, and the rules seem to change.”
Want even more tips? Find them in the comments section below, and please share your own.
Oh, and good luck!
New! Listen to the January 2017 CubCast
The January 2017 episode of CubCast, the monthly podcast for Cub Scout leaders, includes even more great advice.
Because there is not a simple “yes” or “no” answer to many tax questions, CubCast invited tax expert and legal counsel for the BSA Russ McNamer to the show.
Photo by Horrgakx on Flickr