Friday, January 8, 2010

On Mileage and More

The Internal Revenue Service has announced its vehicle mileage reimbursement rates for the 2010 calendar year. Since many volunteer transportation programs peg their volunteers' reimbursements to these rates, it can be pretty important stuff.

Basic details are in a December 3, 2009 announcement on the IRS web site. More details are in IRS Revenue Procedure 2009-54, also available from that site.

In short, the standard mileage rate for tax-deductible business use of a personal vehicle is 50 cents per mile. The amount that individuals may claim when deducting their own medical travel expense is 16.5 cents per mile, and the amount that individuals can claim as a charitable deduction for travel is 14 cents per mile.

While the IRS can adjust the business and medical mileage rates every year, based on its economic analyses, the charitable rate is fixed by law in the Internal Revenue Code, and can only be changed by Congress. For many in the nonprofit sector, this has been a challenging issue, especially as fuel costs have soared in recent years.

Volunteer transportation is especially prevalent in the field of senior services. The National Association of Area Agencies on Aging, among others, has been noting that a fixed mileage rate, given the current trends in the energy industry, is an increasing challenge to the ability to find and retain volunteers for such important services as meal delivery, taking seniors to medical appointments, etc.

Fuel prices in general are expected to be a challenge this year in all sectors of the transportation community, including both the public and charitable sectors. The Washington Post recently had an article on this topic that helps set that stage for discussion.

A number of organizations are working to change the way in which the charitable mileage rate is calculated. Some analysis of this issue can be found at the Independent Sector web site, but PLEASE NOTE that neither the NRC or CTAA are encouraging any positions on the legislation cited in that site (Independent Sector is promoting a particular bill, but we don't do that here).

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