The Wall Street Journal was the first to report that the IRS announced an increase in the optional standard mileage rates for the final six months of 2008. Effective today, July 1st, the mileage rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008.Note this is a 16% increase since the beginning of the year and not at all typical for the IRS as they usually updates the mileage rates only once a year in the fall for the next calendar year. One exception was recent, in 2005, when the government raised the rate in the middle of the year, because of the gasoline-price hikes related in part to Hurricane Katrina.
While many can take advantage of the higher rate (thank you IRS for feeling our pain), many of my pastor friends may not. In working with churches and ministries, I've noticed that many will establish a specific reimbursement rate, likely the rate that the IRS prescribes, but do not update it frequently. I've seen rates posted on reimbursement forms that are a few years old or even significantly less than the maximum that the IRS allows (i.e. 25 cents a mile).
One of the ways to avoid this issue is to have a policy (remember the 3-P’s - Policies, Procedures and Practices that need to be aligned and appropriate for the ministry) that the church or ministry will “reimburse employees for mileage at the IRS rate as established from time to time.”
Simple and pain free.
