Doing Charity or Out On Medical Leave? Don't miss out on these tax deductions!

Doing Charity or Out On Medical Leave? Don't miss out on these tax deductions!
Photo by Katt Yukawa / Unsplash

Did you know that business travel is not the only type of deduction you can submit to the IRS? Trips made for charitable or medical purposes count too!

Deducting mileage expenses relating to charitable activities can be handled through the Standard Charity Mileage Rate, or by deducting the actual expenses associated with the trip.

For example, doing volunteer work would qualify you to deduct the trips to and from the place of volunteering, using the Charitable Mileage Rate.

You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses that are directly related to the use of your car in giving services to a charitable organization. For example, you can deduct your driving expenses if you drive each week to a local hospital to volunteer.

You can deduct your actual expenses, which primarily consist of gas and oil. However, you cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.

Instead of deducting your actual expenses, you can use the standard mileage rate of 14 cents a mile for charitable activities. The 14 cents per mile rate is very low. It hasn’t been adjusted in many years. Thus, you'll likely get a larger deduction if you use the actual expense method.

You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.

Medical deductions

Medical expenses can be a large part of your yearly spending, especially if you were admitted to a hospital or clinic in the recent past.

Deductible medical expenses include payments for transportation primarily for and essential to medical care that qualify as medical expenses, such as payments of the actual fare for a taxi, bus, train, ambulance, or for medical transportation by personal car, the amount of your actual out-of-pocket expenses such as for gas and oil, or the amount of the standard mileage rate for medical expenses, plus the cost of tolls and parking fees

You cannot include in medical expenses depreciation, insurance, general repair or maintenance expenses. This differs from the way the actual expense method works when you drive for business. The following items cannot be deducted either:

  • the cost of going to and from work
  • travel for purely personal reasons to another city for an operation or other medical care
  • travel that is merely for the general improvement of your health, or
    the cost of operating a specially equipped car for other than medical reasons.

Itemizing Your Deductions

First, to deduct any nonbusiness driving, you must itemize your personal deductions instead of taking the standard deduction. You should itemize only when your total itemized deductions on IRS Schedule A exceed the standard deduction for the year—$6,200 for singles and $12,200 for married filing jointly in 2014. Your itemized deductions include such items as mortgage interest and taxes you pay for your residence, charitable contributions, medical expenses, unreimbursed employee expenses, state income taxes, and certain other items.

If you do itemize, you can deduct driving costs as part of the medical expense deduction. However, this deduction has its own limitations. You may deduct your medical expenses only to the extent they exceed 10% of your annual adjusted gross income (but, if you’re over 65, the threshold is 7.5% of AGI through 2017).

If you use the standard medical mileage rate, you may deduct 24 cents per mile driven for medical reasons. This is much lower than the standard mileage rate applicable to business driving—57.5 cents per mile in 2015.

No matter which method you use, you can also include parking fees and tolls.

You should use whichever method gives you the largest deduction.

Example: In 2015, Bill drove 2,800 miles for medical reasons. He spent $500 for gas, $30 for oil, and $100 for tolls and parking. His total using the actual expense method is $630. His total using the standard medical mileage rate is $672 (24 cents x 2,800 = $672). He adds the $100 tolls and parking for a total of $772. Bill includes the $772 of car expenses with his other medical expenses for the year because the $772 is more than the $630 he figured using actual expenses.