Quite often, the church or the pastor (or both) pay for expenses related to church business, which can quickly add up over time. What many members and church leaders fail to realize is that the clergy can be reimbursed for business expenses, and mileage related to transportation costs is one of the reimbursements that is often overlooked.
What Is Mileage Reimbursement?
Essentially, mileage reimbursement is a refund for mileage costs accrued from the use of private vehicles for professional purposes. The IRS publishes a revised rate each year that is used to calculate mileage reimbursement.
Conventional Procedure For Clergy Members To Get Reimbursed For Mileage
As long as all of the records required by the IRS are accurate and physically present, there should be no obstacles preventing the church from reimbursing any clergy members for transportation costs related to business use. Reimbursement would be based on the standard mileage rate provided by the IRS.
Accounting For Automobile-Related Expenses
A business expense related to the use of transportation is typically addressed in one of the following three ways:
- The church buys or leases the automobile and assumes the expenses for it. The pastor or any clergy members are then required to report and reimburse the church for any personal use of the vehicle in order to adhere to federal tax laws.
- The church pays out a monthly auto allowance based on a preset figure.
- The church reimburses church employees based on the actual miles driven using the standard mileage rate issued by the IRS.
Mileage Deduction Record Requirements
In order to be eligible for the mileage reimbursement, the Internal Revenue Service recommends that you keep the following mileage records:
- Combined miles for the year
- The exact mileage for each specific business use
- The date, place, and purpose of the trip
Standard Mileage Rates For 2022
Here are the mileage rates for 2022 based on the recommended cents per mile driven:
Ministry: 58.5 cents
Business: 58.5 cents
Moving: N/A in 2021
Medical: 18 cents
Charitable: 14 cents
Other Useful Tools To Help Manage Your Church Finances
Many churches are utilizing software that has been specifically created for the unique requirements of the ministry when it comes to accounting and management. Some of these extraordinary requirements for managing church finances include:
- Fund accounting
- Tracking tithes
- Pastoral payroll
- Making tax payments
- Generating church financial statements
- Creating a custom chart of accounts
- Mobile giving capabilities
Does your current management software address all of these important tasks? If not, you may want to take a look at Aplos.
Aplos was specifically created to simplify the bookkeeping and financial management process for churches and nonprofits—a declaration that cannot be shared by many of the accounting programs on the market. Click here to see how Aplos can simplify accounting for your church.
