Are You Getting Paid for Every Nonprofit Mile You Drive?

September 6, 2017

(Last Updated On: August 8, 2018)

Let’s face it: most of us working in the nonprofit world don’t have company cars. Fifty-seven percent of nonprofits in the country (almost 900,000 organizations) reported revenues under $100,000 in 2016. (See my prior post on how to grow a nonprofit for a deep dive into those statistics). It’s safe to say there are a lot of people driving their own cars on nonprofit business, (which does not include the trips you make to and from work). I count myself among them.

1. Are you getting paid for every nonprofit mile you drive?

The question then becomes, is your organization reimbursing you for those miles? If not, are you claiming them as a tax deduction? If neither of these things is happening, you should definitely read on, but if you answered one or the other in the affirmative, the next question is “how are you accounting for the miles driven?”

I remember the days of keeping a clipboard in my car to record miles driven on behalf of the small college where I was a vice president. If I remembered to do the recording, I still had the extra step at the end of the month of recording the mileage in an Excel spreadsheet and submitting it for reimbursement. It was a hassle.  And it was dependent on me for its accuracy.  I know there were many, many miles for which I was not compensated because I forgot to record them or I underestimated the distance after the fact.

2. why should you care about getting paid for every nonprofit mile you drive?

With the advent of smart phones and their GPS capabilities, new software is available to make the onerous task of mileage tracking a breeze. What’s even more important, is that mileage, tracked automatically, can mean more money in your paycheck if you’re employer is reimbursing you.  If not, that same mileage, claimed as an unreimbursed employee expense, can reduce the income tax you owe.

Getting paid for every nonprofit mile you drive

My nonprofit does reimburse me for miles driven. In the current year, over half of the mileage on my car is attributable to the driving I’ve done on behalf of the organization. Because of the software that I use to keep track of this, getting reimbursed on a monthly basis has been a very simple process, one which I will explain further, below.

Nonprofits that are just getting started may not have the funds on hand and/or a policy governing such reimbursements. These miles might still be claimed, however, as unreimbursed employee expenses.  As such, they are subject to a 2% floor, meaning that, as an employee, you can only deduct the amount that exceeds 2% of your adjusted gross income and you will need to itemize deductions to take advantage of this tax savings tool.  (See IRS Publication 529).  At $0.535/mile, however, the dollar value of miles driven on employer business can add up quickly.  Let’s say I make $50,000 per year at my nonprofit.  Two percent of that amount is $1,000.  At $0.535/mile, I would have to drive only 1,869 miles on behalf of my organization to start claiming the deduction.

Many of us can’t get enough of the nonprofit world; so, we serve on the boards of other nonprofits in our “free” time. Miles driven on charitable business can be claimed as an in-kind charitable contribution at a rate of $0.14/mile. There is no floor on the deduction of charitable business miles; however, you will need to itemize deductions on your federal return to be able to utilize this tax savings strategy. (See IRS Publication 526).

3. the solution to getting paid for every nonprofit mile you drive

I keep track of all this with a software product called “TripLog.”  As is the case with much of what I recommend here, there are many other applications out there purporting to do the same thing. Go to http://appcrawlr.com, search for apps like TripLog and you can see a long list. I’m not a software expert and make no claims about how TripLog compares with other products. I will  tell you, however, that TripLog has operated seamlessly for me for several years.  And, it’s hard to argue with its price. Here’s how it works:

  • Once set up on your smart phone, the app uses GPS to track your movement (anything over 5 miles an hour) automatically.
  • You can help the app to characterize your trips as business, charity, medical or personal from your phone or on the web, as shown below.  TripLog automatically syncs your data to your web account.  So, at the end of the month, you simply bring your monthly trip log up on your computer screen and verify the accuracy of what’s been recorded for that month.

Getting paid for every nonprofit mile you drive

  • You can track fuel cost, tolls and parking fees related to any trip by making a manual entry in the application. You can even upload photos of receipts.
  • Finally, there are a wide variety of reports that can be run and downloaded in the web-based version of TripLog, making it easy to meet anyone’s reimbursement requirements.

What does this cost? A mere $3 per month or $30 billed annually.  There are free and cheaper paid versions of TripLog as you will see if you go to the website. But they don’t include the data sync to the web. I’m willing to pay more to be able to actually view things on a large computer screen and to have the benefit of printable reports, so I do have the $30 annual plan.  A bonus is that every plan, even the free one, includes up to 5 vehicles. Every plan also includes an actual driving route for each trip – a helpful feature for those who may want to see what their kids have been up to. I believe in the program, so I’ve become an affiliate.  In that capacity, I can offer you a 20% discount if you sign up through this link or through the link on my resource page.

Start saving money and stop guessing about nonprofit miles driven! Choose to Improve and get TripLog or a similar application to simplify your life and keep more of your very hard-earned money in your pocket.

 

 

 

 

 

 

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