Sunday October 1, 2023
Should The Charitable Mileage Rate Be Increased?
On June 13, 2022, average prices reached $5 per gallon in the United States. However, with concerns about a recession, the world price of oil has recently declined from $140 per barrel to approximately $100 per barrel. As a result, the average national gas price has declined to $4.75 per gallon.
An American Automobile Association representative, Drew Gross commented on the changing gas prices and stated, "It is kind of like the stock market: You have these incredible swings, when it sees rising rates or talk of a recession, a global recession, that means an economic slowdown, which means less oil is being consumed. That is bad news for the oil industry. And that is why prices have been dropping."
The increased cost of gas impacts many volunteers for charitable organizations. The mileage rate for 2022 for volunteers who drive for their favorite nonprofit is $0.14 per mile. This charitable mileage rate is much lower than rates for medical purposes or business mileage. The charitable mileage rate has been locked at $0.14 per mile since 1998.
There is an option for charitable volunteers to use the "actual costs" model. This would permit you to deduct your actual costs for gasoline and oil, but not the costs for maintenance, tires or insurance. If you use this method, you will need to track the actual expenditure for gas and oil for your charitable trips.
The charitable mileage deduction is only available to the driver of the vehicle. Additionally, the deduction is not available if you are driving to help a specific individual. Gifts for the benefit of a specific person are honorable and meritorious, but do not qualify for a charitable deduction. Gifts that are deductible are made to qualified exempt nonprofit organizations. These may include benevolent, religious, educational, scientific, literary, and other exempt organizations.
In order to deduct your charitable mileage, you will need to maintain a logbook. You should record the date, the number of miles, the charitable organization and the location for your trips. Your total miles for the year may then be multiplied by $0.14 per mile and deducted on IRS Form 1040.
In recognition of the increased transportation costs for charitable volunteers, U.S. Representative Angie Craig (D–MN) and Representative Pete Stauber (R–MN) have joined together to introduce the bipartisan Tax Emergency Adjustment for Mileage Volunteers (TEAM Volunteers) Act. This Act would increase the charitable mileage rate from 14 cents per mile to the current business travel rate of 62.5 cents per mile. The TEAM Volunteer Act would apply for a two-year period after passage.
Representative Craig stated "Volunteer drivers donate their time and resources to ensure that those most in need are able to receive the supplies and resources they need to survive. But today, increasing costs and inflationary pressures have made it more difficult for them to do so. Raising this volunteer reimbursement rate will allow us to meet the unique challenges of this moment and ensure that dedicated volunteers can continue providing crucial services to our communities."
Editor's Note: There have been several proposals to increase the charitable mileage rate. The current 2022 law remains a deduction of $0.14 per mile until legislation is enacted by Congress. It is quite important for charitable volunteers to have good records to substantiate their milage, which includes keeping a logbook to record their mileage and claim the $0.14 per mile deduction.
Published July 8, 2022
IRS Tax Collection Voice Bots Successful
IRS Offers New Voice "Bot" Service
Should the IRS File Your Income Tax Return?
Increased Gas Prices Lead to Higher IRS Mileage Rate
IRS Plans to Hire 4,000 Customer Service Workers