Donations to the PTO are always welcome.
Here are some guidelines from the PTO Today website, but please consult an accounting professional for tax advice. Generally, any gift or contribution for which the donor does not receive anything of substantial value in return is tax-deductible. Here are some examples.
Deductible: A parent makes a $20 contribution to the PTO rather than participating in the latest fundraising drive. The contribution is tax-deductible.
Not deductible: A parent purchases $20 of wrapping paper or cookie dough during the latest fund drive. The amount paid for the products is not tax-deductible, because the parent received something of value in return for the amount paid.
Deductible: A local restaurant contributes a $25 gift certificate to the school’s auction. The value of the gift certificate is tax-deductible for the restaurant.
Not deductible: A teacher makes the winning bid of $25 on the gift certificate. The amount paid is not deductible, because the teacher received the gift certificate in return for her bid. However, if the teacher bid $35 for the gift certificate, then $10 of the amount paid may be tax-deductible. In that case, the PTO must provide a receipt showing the amount paid, the value of the item purchased, and the amount that qualifies as a contribution.
Deductible: The IRS allows tax deductions for mileage and other out-of-pocket expenses. To take a deduction, you must keep written records of the mileage, including the date driven and the name of the nonprofit group for which the driving was conducted. The IRS standard mileage rate for charities may be used (14 cents a mile for 2013). If the donor opts to use actual auto expenses instead of the standard mileage deduction, the operating expenses must also be recorded. For other out-of-pocket expenses, keep written receipts showing the costs paid for items donated to the PTO.
Not deductible: The IRS does not allow a tax deduction for the value of someone’s time or service. In addition, you cannot deduct childcare expenses incurred to enable you to volunteer your time.