Is an automobile allowance taxable?

by Bruce
(Massachusetts)

Our minister receives a fixed amount annually for use of his personal autmobile. This amount is not based on actual mileage, and is not supported with receipts.

It is paid in equal monthly payments. We do not count this amount as compensation and do not withhold any taxes against it.

I believe the minister does not pay income tax on this amount. Does the IRS consider such a payment to be taxable?

vickey's reply

Yes. It is definitely considered income. The only allowance the IRS now recognizes is the housing allowance.

If his "business" mileage was set up as a reimbursement in an account reimbursement plan with a mileage log as his receipt, it would be tax-free income.
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4Comments

Mileage Reimbursement

SSara - Texas

Examples of mileage reimbursements - taxable or non taxable?

Ex 1. Minister requests reimbursement for mileage from place of residence to place of business (church) for meetings or decorating of classrooms on days off. Taxable or nontaxable?

Ex 2. Minister makes hospital visits from place of residence to hospital or home of sick member. Taxable or nontaxable?

Commuting Miles

VVickey

No. Travel from the minister’s home to his regular workplace (church) would be considered commuting miles and are not deductible.

Miles for hospital visits, training seminars, etc. would be deductible.

What mileage is deductible ?

WWayne Ware

Is mileage that a minister travels to get to his church deductible? Our minister lives about 40 miles away and he would like to deduct 80 miles for each trip to the church. Is this acceptable?

Automobile Expenses Reimbursement

MMarcus in Texas

The budget approved by our church members, as recommended by the stewardship committee, includes a separate budget for the pastors travel / transportation. Each month the pastor submits a request for reimbursement of his official church business travel and is reimbursed at the currently allowed rate of about $0.50/mile. We consider this to be the appropriate way to handle these expenses and the pastor maintains detailed records of his official travel expenses should he be audited by the IRS. This is preferred over any type of flat automobile allowance which would definitely be considered as taxable income.
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