Bill to Increase Mileage Deduction for Volunteers Gains Momentum in Senate

September 02, 2008

Bill to Increase Mileage Deduction for Volunteers Gains Momentum in Senate

A key Senator is making a push in Congress for legislation that would increase the tax deduction for people who use their automobiles as part of their volunteer work.

Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, has announced that he supports a bill introduced in July that would help volunteers with the mileage rate. The measure is one of a dozen that are now pending that would change the rate in some way.

Under current federal law, volunteers who drive their cars for charitable purposes may deduct 14 cents a mile for their car costs (or be reimbursed by a charity at that rate without the payment’s being subject to federal income tax).

A growing number of members of Congress have said the rate is too low, especially as gas prices have climbed in recent months.

The bill that Mr. Grassley has endorsed — the Fair Deal for Volunteers Act — would allow the Internal Revenue Service to continually adjust the mileage rate for charitable activities for inflation and other costs without seeking Congressional approval, as the tax agency already does for business, medical, and moving expenses.

The current business rate is 58.5 cents per mile; the medical and moving rate is 27 cents.

“People who volunteer for charity aren’t out to make money, but they shouldn’t lose a lot of money in the process,” Mr. Grassley said in a statement. “Driving a car is more expensive than ever, and driving is critical to a lot of volunteer activities.”

He added: “It makes sense to give the IRS the flexibility to set mileage rates for charity work. This legislation will encourage volunteering and streamline this piece of tax administration for taxpayers.”

The Fair Deal for Volunteers Act (S 3246), which is now pending in the Senate Finance Committee, was introduced in July by Sen. Benjamin L. Cardin, a Maryland Democrat. The bill is also sponsored by Sens. Maria Cantwell, a Democrat from Washington; Patrick J. Leahy, a Vermont Democrat; Barbara A. Mikulski, a Maryland Democrat; and Olympia Snowe, a Republican from Maine.

Mr. Grassley said he encouraged the Senate supporters of the bill to consider adding a provision to the measure that would allow charities to reimburse volunteers at the same rate as business expenses without creating taxable income for volunteers.

— Grant Williams

Comments

Yes I drive a 2500 Dodge Diesel Truck over 300 monthly picking up Supplies for our local Food bank. I certainly would like to see a increase from .14. It certainly didn’t help that I had investments in Lehman Brothers. I try being a nice guy, but it seems I’m getting screwed.
Greg

— Gregory Hein Sep 27, 04:44 PM #

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