TO: Interested Ministries FROM: Jim Bramer, Retired Auditor-CPA
FILE: 0076-02/allRE: Vehicle Expenses at Ministry Issues Originated: August 2001
Below is a hypothetical Online Email (EML) thread (THRD) between any one of the following MFTeam members: PAT (Ministry Chief Executive), LEE: (Ministry Volunteer Treasurer), or FRAN: (Ministry Computer Bookkeeper) and Jim@bcidot.org Click here and go to List of threads (THRDs) at www.bcidot.org
TO: Jim@bcidot.org - - FR: Fran
Our Staff members use their personal vehicles for both personal and Ministry purposes. Such expenses are within our authorized budget.
However, most of these folk are not "finance savvy" so I find that I am continually trying to explain to them how this should best be handled for both of us.
Can you help me, please.TO: Fran - FR: Jim
Hope so..... let me begin by listing the usual vehicle out of pocket expenses: fuel/gas, repairs/maintenance, lube/oil change, tires, financing or interest expense, plus insurance.
But there is also the vehicle Depreciation Expense - which is a little tricky to properly determine.TO: JIM -
Right, plus the fact that each of these individual expenses must be properly divided up for tax reporting purposes between that which is personal and that which is Ministry (as you know, tax people would call this "Business").
Tell us about the IRS's per mile reimbursement process.TO: Fran
OK, the IRS, in my judgment, has done all tax payers (not just Ministry Staffers) a real service since they allow taxpayers to be reimbursed at their annually approved rate per mile and you do not have to keep track of the individual types of vehicle costs listed above. Nor do they require either the Ministry or the Staffer (Tax Payer) to do certain external reporting of such matters or filing special forms, etc.
Staffers simply kept an accurate documentation of Ministry (or Business) miles and regularly get a Mileage Reimbursement from the Ministry. Please go to http://www.irv.gov and search for current rate which covers all of the expenses mentioned above, especially Depreciation Expense. Also go to 0016 for more info along these lines.TO: JIM -
What you mention above is basically what we are doing, but the Staffers get confused when they incur and/or pay bills etc.TO: Fran
I recommend the following Staffer "Mileage Protocol List:"Please Do:
- Use personal funds to pay for all vehicle expenses - and there is no need to divide them between personal and Ministry.
- Get a Mileage Log Book that stays within the Staffer vehicle
- Staffer daily writes down Ministry miles; Reminder: daily commute miles between home and office is NOT Ministry miles.
- Including how it was Ministry related
- At least monthly, use the Mileage Log Book to complete the Mileage reimbursement check request for Ministry mileage costs.
Please Do Not:
- Use the Staffer's Ministry Credit Card (Plastic) to pay for any vehicle expenses; they are to use their personal Plastic to pay for such expenses. The permitted per mile amount as paid by the Ministry is a reimbursement of all types of vehicle expenses - see above - used for Ministry, including depreciation. If really necessary, the Staffer can use the Ministry Plastic to pay for such personal expenses and have them charged to their "Due from Staffer" asset account on the Church books. Then their periodic (at least monthly) mileage reimbursement would be used to pay off any balance in the "Due from Staffer" account - which is zeroed out at least monthly.
- Neither the Ministry or the Staffer file any government forms or report such money received to the IRS under this method as you join the Ministry in doing this process in this approved manner.
TO: JIM -
Thank you. The above "Mileage Protocol List" especially should be very helpful as we work this out with our Staffers.
What (1) about when the Staffer has a Ministry owned vehicle where all of the vehicle expenses are paid by the Ministry and the Staffer uses it some for personal purposes?TO: Fran
The Staffer keeps a record of such miles and pays the Ministry based on the IRS mileage rate mentioned above ..... it is the reverse of what we have mentioned above. See the links below on these topics.
Let us know at Jim@bcidot.org if you still have questions about any of these issues..
See below for other topic relevant links:
0016 Clergy Finance and Tax Issues
0037 Clergy Stipends and Allowances
0092 Use of Personal Computer
5014 Church Buying Protocol
2025 QB and Clergy W-2 Issues
2031 Mileage Reimbursement
The bulk of this Publication originated in August 2001 and was . UPTD: May 02, 2008
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(1) An Onliner Document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
(2) WRIT formats include the perspective of Jim@bcidot.org via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and via FAQ, response to Frequently Asked Questions
