Clergy Tax Facts
Clergy Tax Tip:
The automobile reimbursement for ministry-related expenses is not part of a pastor’s salary. A reimbursement based on the federal mileage rate (listed below) is recommended based on actual ministry miles driven and reported by the pastor. In lieu of such an allowance, the congregation may lease a vehicle for the pastor's use in ministry activity.
The Internal Revenue Service has issued its 2012 optional standard mileage rates that can be used to calculate the deductible costs of operating an automobile for ministry, business, charitable, medical or moving purposes.
Beginning Jan. 1, the standard mileage rates for the use of a car, van, pickup or panel truck will be 55.5 cents per mile for business activities, 23 cents per mile driven for medical or moving purposes. The standard mileage rate for services to charitable organizations is set by statute at 14 cents per mile and remains unchanged.
The rate for business miles is unchanged from the midyear adjustment that became effective July 1. The medical and moving rate has been reduced by 0.5 cents per mile.
The IRS typically sets its standard rate about a month before a new calendar year begins and then keeps it the same for the ensuing 12 months.
2012 Standard Mileage Rates
Mileage Rate Jan. 1- Dec 31 |
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| Ministry | 55.5 cents |
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| Business | 55.5 cents |
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| Moving | 23 cents |
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| Medical | 23 cents |
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| Charitable | 14 cents |
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| Education Expense (Job related only) | 55.5 cents |
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| Job Seaching (same occupation) | 55.5 cents |
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| Motorcycle | 48 cents |
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2011 Standard Mileage Rates
In response to rising gasoline prices, the IRS has raised the standard mileage rate for ministry and business use of an automobile from 51 cents per mile to 55½ per mile, effective July 1 (Announcement 2011-40). The medical and moving standard mileage rate is increasing to 23½ per mile, also on July 1.
The new optional standard mileage rates will apply until superseded by future guidance and can be used by ministers to calculate the deductible costs of operating an automobile. Alternatively, ministers can instead use their actual costs, but must maintain adequate records and be able to substantiate their expenses.
Mileage Rate Jan. 1- June 30 |
Mileage Rate |
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| Ministry | 51 cents |
55.5 cents |
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| Business | 51 cents |
55.5 cents |
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| Moving | 19 cents |
23.5 cents |
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| Medical | 19 cents |
23.5 cents |
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| Charitable | 14 cents |
14 cents |
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| Education Expense (Job related only) | 51 cents |
55.5 cents |
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| Job Seaching (same occupation) | 51 cents |
55.5 cents |
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| Motorcycle | 48 cents |
48 cents |
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2010 Standard Mileage Rates
Mileage Rate |
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| Ministry | 50 cents |
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| Business | 50 cents |
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| Moving | 16.5 cents |
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| Medical | 16.5 cents |
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| Charitable | 14 cents |
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| Education Expense (Job related only) | 50 cents |
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| Job Seaching (same occupation) | 50 cents |
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It is important to keep accurate mileage records for claiming a mileage deduction. The records to keep are:
- Total miles for the year
- Mileage for each deductible use
- Times and dates
- Place/address
- Business purpose
- Charitable purpose
- Educational purpose
- Medical purpose
- Moving purpose
2011 $.51/mile - effective 1/1/11
2011 $.55.5/mile - effective 7/1/11
2010 $.50/mile
2009 $.55/mile
2008 $.50.5/mile - effective 1/1/08
2008 $.58.5/mile - effective 7/1/08
2007 $.485/mile
2006 $.445/mile - effective 1/1/05
2005 $.485/mile - effective 9/1/05
2005 $.405/mile
2004 $.375/mile
2003 $.360/mile
2002 $.365/mile
2001 $.345/mile
2000 $.325/mile
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Get a better understanding of U.S. tax laws as they relate to pastors and churches with the Church & Clergy Tax Guide |
Every church and its employees want to feel confident that their compensation plan is reasonable and fair. |
To accomplish your church's mission and vision for ministry you need to effectively manage your church's finances |
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Clergy should not view this information as a substitute for professional advice. This information is subject to change, due to administrative rulings or interpretations and or technical corrections by the IRS. If legal advice or other expert assistance is required, the services of a competent clergy tax professional person should be sought.
