The IRS has announced the following standard mileage rates for 2013:
- 56.5 cents per mile for business miles driven
- 24 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The rate for business miles driven during 2013 increases 1 cent from the 2012 rate. The medical and moving rate is also up 1 cent per mile from the 2012 rate.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
That info is from Notice 2012-72
I am curious about the mileage for usage in the service of Charitable Organization. I was on the board of a non-profit last year and they paid the $.55 per mile instead of the $.14. Is there a time when, in the service of the nonprofit, that they would pay the business rate and a time when they would pay the regular $.14?
Good question Lee. The $0.55 rate is the limit allowed by the IRS for reimbursement to employees for personal use of vehicles without having to report the amount as taxable income. Up to that amount does not need to be reported. You may also use that rate for using your personal vehicle for business purposes if you are not reimbursed.
If you use your vehicle for assisting a nonprofit organization, you may only claim a charitable deduction of $0.14 per mile.
Thank you, Jim,
So, to be very clear, if I was on a board of a nonprofit, and I represented the nonprofit in the community, driving all over the state, I should only be reimbursed the $.14? Correct?
If the organization is diving out the $.55+ are they in violation of the IRS code? What usually needs to be done if that has been the case?
Thanks,
Lee
Update 5-15-14 – I retract my previous comments on the rate that may be used by a charity to reimburse its volunteers for personal use of vehicles.
By Congressional action, individuals may deduct $0.14 per mile for the personal use of vehicles while performing volunteer services to a tax-exempt charity. Reimbursements by the charity to the volunteer should be limited to the same amount, $0.14 per mile. Any reimbursement over that rate should be reported as personal income to the volunteer.
The following comments are struck out. Why not just delete the post? Two reasons. First, the internet is forever. The post is cached by Google and likely cached by other search engines. That means the original post will be around until Jesus returns or Google turns off all their server farms, whichever comes first. Second reason is I have announce corrections will be made by striking out the incorrect information. That one of my posts is the fourth item listed in a Google search emphasizes the need to address the correction properly.
Lee, actually if an NPO choose to do so, it could reimburse their staff and volunteers up to $0.55 per properly reported mile without creating any taxable income. If the ministry does not reimburse thier staff, the employee could claim a deduction on Schedule A for $0.55 per mile, since that would be a nonreimbursed employment expense (ignoring a couple of qualifiers, such as it would be itemized, etc.) If a volunteer uses their vehicle and is not reimbursed, the person can claim a charitable deduction for $0.14 per mile on Schedule A. It is fairly complicated, as you can see.Thanks for your question.
Hi Jim,
here is an interesting twist. Our non-profit is in rural up-state NY. our members often drive from Boston, NYC and even Canada to attend meetings and/or assist at events.
Would the driving to and from be able to be considered as a charitable deduction @ $0.14 per mile on Schedule A?
Hi Theresa:
Based on only what you described, the driving from Boston and NYC to help with events would be a charitable deduction. I am not familiar with Canadian tax law so don’t know about that. For the meetings, it depends what is done during the meetings. If furthering exempt mission, seems it would likely be deductible. If providing service or value to member, not so sure. Check with your tax advisor.
Jim
I am a paid employee of a 501(c)3. What mileage reimbursement should I expect when directed to attend out of town conferences for the non-profit business?
Travel on behalf of your charity employer would constitute business travel for purposes of the standard mileage allowance. You should expect to be reimbursed based on your employer’s policy. Reimbursement under an accountable expense reibursement plan up to the IRS maximum mentioned above, $0.565, would be non-taxable to you. From my limited observations, the typical rate used for mileage reimbursements is the maximum IRS rate, but that is a policy decision for each organization.
I am on the board of a non-profit professional organization (SHRM, ASTD, etc.), and I frequently reimburse educational speakers at our monthly membership events for miles. These speakers are not part of the staff or the membership group, but rather providers sharing information to the group.
It is our understanding that we should be reimbursing these speaker’s miles at .14/mile rate. Can someone confirm? We recently had someone push back and compared us to other groups that seem to be reimbursing at the business rate, citing that we are not a charity.
Hi Jeff:
From the fractional information you mentioned, it sounds like the mileage is to a speaker not a volunteer, which makes it sound like compensation, right? The $0.14 is the deductible amount that a volunteer may claim for unreimbursed use of vehicle.
Jim
Thanks for the quick reply Jim. Yes that is correct. The reimbursement is to a provider, though unpaid. We are reimbursing them for the expense they inccur. Other than providing the service, they have no other affiliation to the chapter.
What other information can I provide to complete the question? Is there an IRS source I can reference where this information lives? I am sure I will meet some resistance when I condridict our conventional wisdom of our Chapter’s treasurer.
Thanks again.
Hi Jeff:
I think you are to the point where you need to consult with your outside accountant. As a hint, discuss the concept of accountable expense reimbursement plan and whether it can apply to non-employees.
Jim
We have paid mileage reimbursement at .565 per mile to individual volunteers working on hiker biker trails in amounts in excess of $600. We have considered this to be reportable on Form 1099-MISC. How would the individuals report the 1099-MISC income without incurring a tax liability. OR, is no 1099-MISC not required for expense reimbursement to volunteers?
I retract my previous comments elsewhere on this blog regarding the rate that may be used by a charity to reimburse its volunteers for personal use of vehicles.
By Congressional action, individuals may deduct $0.14 per mile for the personal use of vehicles while performing volunteer services to a tax-exempt charity. Reimbursements by the charity to the volunteer should be limited to the same amount, $0.14 per mile, or there will be taxability issues. Any reimbursement over that rate should be reported as personal income to the volunteer. I recommend you consult with your tax advisor to address your specific situation.
in order to save money, our non-profit is considering reimbursement rate for business miles on personal vehicles at .$34 (essentially removing the reimbursement for the depreciation portion). Is this ok?
Hi James:
The IRS rates are upper limits for reimbursements to avoid having to handle such payments as taxable income. A business or ministry can use lower rates if it wishes. Make sure you are using an accountable expense reimbursement plan and consult with your own tax advisor for the impact of any other distinctive factors in your specific situation.
Thanks for asking.
Jim