Mileage reimbursement for church volunteers

[fliszt]

I was lying in

bed last thinking about this. It dawned on me that the church can pay (reimburse) whatever they want to. That is not the question I originally thought. I thought the question was what can a church volunter deduct on the sch A -- Charity or business.
I reread the question now, and it doesn't exactly tell whether it's deduction or receipt of ....
I agree with the others that the deduction is charity. $.14/mile. A charity worker is not a business worker unless the person is a W2 employee of the church.

[JohnH]

I know it's speculative,

but since I don't have anything better to do at this time of the year:

If a volunteer is reimbursed 3000 miles at the current business rate (approx $1,400), and if he church doesn't want him/her to in the position of being taxed on the excess over the .14 statutory rate, could the church pay that person $100 in wages and then consider the reimbursement to have been made to an employee under an accountable plan?

[veritas]

bed last thinking about this. It dawned on me that the church can pay (reimburse) whatever they want to. That is not the question I originally thought. I thought the question was what can a church volunter deduct on the sch A -- Charity or business.
I reread the question now, and it doesn't exactly tell whether it's deduction or receipt of ....
I agree with the others that the deduction is charity. $.14/mile. A charity worker is not a business worker unless the person is a W2 employee of the church.

Larry we need to talk....seriously

[fliszt]

Veritas,

<"Larry we need to talk....seriously">

Why?? Because I lie in bed and think about taxes?? I'm too old to think of anything else!!

[Snaggletooth]

My Vote

If such a volunteer came to me to fill out his/her taxes, and was reimbursed OVER 14 cents per mile, I would NOT report it as income unless the reimbursement was over the established rate.

14 cents per mile is a joke to begin with. Unless you ride a Honda motorbike, your cost for gas alone exceeds this. "Fair" doesn't equal tax law, but after reading the various cites above, I would be hard-pressed to conclude this is income.

For baseball runners, "tie" goes to the runner. For grey areas, "tie" goes to my clients.

[Bees Knees]

And the correct answer is….

IRS Pub. 4492 (Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma) on page 4 has Katrina related mileage reimbursement amounts for charities.

40.5 cents from Aug 25 - Aug 31 2005, 48.5 cents for Sept. 1 - Dec. 31 2005, and 44.5 cents for Jan. 1 through Dec. 31 2006.

Why even list the mileage reimbursement rates for Katrina if they are the same as the normal charitable rates (which would be same as normal business rates)? Why specify the increased rates for Katrina have expired if they were the same as normal charitable rates?

The only way it makes sense to me is if the normal charitable rates were lower than Katrina rates, which would then make the normal charitable rates for reimbursement lower than business reimbursement rates.

This is the correct answer.

The reason IRS Pub 4492 says you can reimburse charitable mileage up to the business standard mileage rate for Katrina related charitable work is because the Katrina law specifically added that language in the law. It reads:

SEC. 304. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS
EXCLUDED FROM GROSS INCOME.
(a) IN GENERAL.—For purposes of the Internal Revenue Code
of 1986, gross income of an individual for taxable years ending
on or after August 25, 2005, does not include amounts received,
from an organization described in section 170(c) of such Code,
as reimbursement of operating expenses with respect to use of
a passenger automobile for the benefit of such organization in
connection with providing relief relating to Hurricane Katrina
during the period beginning on August 25, 2005, and ending on
December 31, 2006. The preceding sentence shall apply only to
the extent that the expenses which are reimbursed would be deductible
under chapter 1 of such Code if section 274(d) of such Code
were applied—
(1) by using the standard business mileage rate in effect
under section 162(a) at the time of such use, and
(2) as if the individual were an employee of an organization
not described in section 170(c) of such Code.

If you already could reimburse at the standard business mileage rate tax free, why would this special rule saying you can do it for Katrina only apply between the dates listed?

The answer is, you never could reimburse tax free at the business standard mileage rate for volunteer charitable work, unless the volunteer is an employee of the charitable organization.

So the answer is…anything reimbursed above 14 cents per mile for volunteer charitable work is taxable, unless you are performing services as an employee of the organization, OR you were performing volunteer charitable work connected with Katrina between August 25, 2005 and December 31, 2006.