Reimbursing Church Employees' Miles
How to make the most of the IRS' standard mileage rate.

Background. Each year the IRS announces a new "standard mileage rate" that can be used by taxpayers to compute a deduction for the business use of a vehicle. This rate also can be used by employers to reimburse workers' business miles under an accountable expense reimbursement arrangement. The standard mileage rate is an important concept for church treasurers, since many churches reimburse staff members' business miles using this rate.

Example. Pastor D owns his car and kept records throughout 2000 showing that he drove the car a total of 12,000 miles, of which 6,000 miles were for business purposes (500 per month). Pastor D submitted records to the church treasurer each month documenting business miles driven for the previous month, and he was reimbursed at the standard mileage rate. The standard mileage rate for 2000 was 32.5 cents for all business miles driven during the year. As a result, Pastor D received reimbursements of $1,950 (32.5 cents per mile x 6,000 miles).

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Posted: February 1, 2001

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