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June 23, 2011

IRS Increases Mileage Rate


The Internal Revenue Service announced this morning it has increased the optional standard mileage rate that employers can use to reimburse employees who drive personal vehicles for business purposes.

The IRS increased the rate to 55.5 cents per mile for travel occurring between July 1 and December 31.

The rate was 51 cents for January 1 to June 30.

Many pastors and staff members drive their personal vehicles for church-related business, such as visitations or special events. If properly tracked, those miles can be reimbursed by churches (or pastors and staff members may be able to calculate a deduction for their annual tax returns).

Chapter 7 of the 2011 Church & Clergy Tax Guide further explains reimbursements of transportation expenses.

Related Tags: business administrators, church, church budgets, finance, finances, IRS, Management, pastor, receipts, reimbursements, staff, stewardship, tax, treasurers, volunteers


How can you really track your miledge properly. Do you have a recommendation?

Anita--That's a good question. The most straightforward way many churches handle mileage reimbursements is under an accountable arrangement, in which pastors and staff keep travel logs and submit them for reimbursements at least every 60 days. Under this arrangement, the church is not required to report the reimbursements as income on employees' Forms W-2 (Richard Hammar's "2011 Church & Clergy Tax Guide," Page 268).

For those travel logs, it can be a simple spreadsheet kept in the pastor or staff member's car. The master template should include date, destination, business purpose of trip, odometer reading at the start of trip, odometer reading at the end of the trip, and total miles driven on the trip, with open slots below each of those headings to track multiple trips.

It's important pastors and staff submit those logs on a regular, timely basis (i.e. once a month).

I hope that helps!

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