Clergy Tax Tips: Keeping a Vehicle Mileage Log

As mentioned in a previous blog post in regards to pastors claiming their car payments as tax deductions, a pastor must choose what vehicle deduction they prefer: a vehicle deduction using standard mileage rate or the business use percentage of actual costs. Therefore, when it comes to vehicle deductions, pastors are encouraged to keep a mileage log for business use that includes total miles.

Current tax law requires proper record-keeping when it comes to deducting business use of your vehicle and if a pastor chooses vehicle deductions based off of standard mileage, consistent logging of mileage will save them time and money when tax season approaches. Here are some clergy tax tips when it comes to keeping a mileage log.

  1. Keep a pen and a notebook in your car in a readily accessible spot.
  2. Copy down your vehicle’s odometer reading every January 1 and/or the odometer reading on the date that you begin using the vehicle for business purposes.
  3. Create a file called “vehicle expenses” and keep in the car at all times, possibly in the glove compartment. 
  4. Write down date, number of miles driven and purpose for each business trip in one section of your notebook. Add each additional trip to your existing list.
  5. Write down any expenses paid for operating or maintaining your car in a separate section of your notebook. List the date, amount paid and type of expense.
  6. Save any and all related receipts in your file folder as well.
  7. Keep track of parking fees, what the purpose was and dates paid in another section of your notebook and save all parking receipts in your file folder.
  8. Separately keep track of any work-related classes taken during the year and log the dates, names of classes, miles driven, etc.
  9. Keep track of the round-trip commuting distance between work and home.

Once you have all of this necessary information collected, once tax time rolls around you’ll be ready and prepared. Here’s how to go about totaling mileage and expenses.

  1. Obtain total mileage by subtracting beginning odometer reading from end odometer reading.
  2. Add up business miles driven, miles driven to classes, vehicle expenses paid during the year, parking fees paid, etc.
  3. Calculate number of days worked during the year and multiply by the round-trip distance to and from work.
  4. Add up reimbursements for mileage or vehicle expenses.
  5. Use these totals when preparing income tax for ministers returns or give figures to your tax preparation professional.
  6. Save your notebook for at least three years and transfer the new January 1 odometer reading to your new notebook.

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Sarah Wozniak

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