Mileage deduction question - business rate or charity rate for non-profit employee travel?

Wait, so employees can't deduct mileage anymore even if it's not reimbursed? That seems unfair. Does this mean OP should ask their non-profit to reimburse them instead since they can't deduct it anyway? And is there any chance this will change for 2026?

You're absolutely right that it feels unfair. The 2017 tax law changes eliminated most unreimbursed employee business expenses for regular W-2 employees through 2025. This means employees generally cannot deduct mileage or other business expenses that their employer doesn't reimburse. Yes, asking for reimbursement from the non-profit employer would be the best approach. The non-profit can reimburse using the business mileage rate tax-free to the employee, and they can deduct it as a business expense. The current law is set to expire after 2025, so there's a possibility these deductions could return, but nothing is certain until new legislation is passed.

Does this service actually review your specific documents? I've been using a regular tax software but it never gives me clear answers about edge cases like this. How detailed do you need to be with your mileage records for them to analyze it properly?

I'm skeptical about AI tax tools. How can it possibly know all the tax laws and exceptions? Did it give you actual citations to IRS publications or was it just general advice? I'm worried about getting audited if I follow AI recommendations.

Yes, it reviews your actual documents - you can upload mileage logs, receipts, and even handwritten notes. It was quite thorough in analyzing my specific driving patterns and explaining which qualified for deductions. I just uploaded my mileage tracker spreadsheet and it identified patterns I hadn't noticed. Regarding tax laws, it actually provided specific citations to IRS Publication 463 for business travel and Publication 526 for charitable contributions. Each recommendation included the relevant tax code references and publication sections. This wasn't general advice - it showed exactly where in the tax code these rules are defined, which gave me confidence in the guidance.

How does this actually work? Do they have some special connection to the IRS or something? Seems too good to be true that they could get through when the wait times are typically hours long.

Yeah right. No way this is legit. The IRS phone system is deliberately designed to be impenetrable. If this service actually worked, everyone would be using it and the IRS would shut it down. I've tried everything to get through and nothing works. This has to be some kind of scam.

They don't have special access - they use an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a human agent, they call you and connect you directly. It's basically like having someone else wait on hold instead of you. It's definitely legitimate - the IRS can't really "shut it down" because the service is just automating the process of waiting on hold that anyone could do manually. I was skeptical too, but it worked exactly as advertised. I got connected in about 15 minutes when I had previously spent hours trying to get through on my own. The IRS doesn't care how you get connected, they just answer the calls that make it through their system.

Yes, that's correct. Prior to 2018, if your employer reimbursed you at a lower rate than the IRS rate, you could deduct the difference as an unreimbursed employee business expense on Schedule A (if you itemized and exceeded the 2% AGI threshold). But the Tax Cuts and Jobs Act eliminated that deduction through 2025. The only people who can still deduct unreimbursed business expenses are qualifying performing artists, fee-basis state officials, armed forces reservists, and employees with impairment-related work expenses.

Thanks for confirming. I was afraid of that. So basically the best approach is to try to negotiate full reimbursement from the non-profit at the business rate rather than trying to deduct anything on your personal taxes. At my org, we've had better luck getting reimbursed when we frame it as something the organization should be covering rather than pushing it to individual employees who can't deduct it anymore.

Yes, the difference is huge and it's completely correct. For 2023, the charitable mileage rate was 14 cents per mile while the business rate was 65.5 cents for the second half of the year. The rates typically adjust annually, but the charitable rate has been stuck at 14 cents for many years because it requires an act of Congress to change it (unlike the business rate which the IRS can adjust). This means for every 1,000 miles: - Volunteers (charitable rate): $140 deduction value - Employees (business rate): $655 deduction value The distinction is that volunteers are "donating" their services while employees are conducting business. It's a massive difference that many people miss!

Great approach! When I made this case to my non-profit's board, I found it helpful to frame it as a "revenue neutral" change that actually benefits everyone. Here's what worked for me: 1. Show them the math - if they reimburse $1,000 in mileage, they save roughly $200-300 in taxes (depending on their tax situation), while employees get $1,000 tax-free instead of $0 in deductions they can't use. 2. Point out that other organizations they partner with likely already do this - it's becoming standard practice as more non-profits realize the tax law changes. 3. Emphasize that it helps with employee retention and fairness - asking staff to absorb business expenses they can't deduct is essentially a pay cut. 4. Suggest starting with a pilot program or cap if they're worried about costs spiraling. The key is showing them it's not just an expense but a more tax-efficient way to handle something that should have been a business expense all along. Good luck!

Thanks for mentioning the documentation requirements - this is so important! I've been pretty casual about my record keeping and just writing down total monthly miles, but you're absolutely right that the IRS wants trip-by-trip details. Do you have a recommendation for which smartphone app works best for mileage tracking? I've tried a couple but they were either too complicated or didn't capture all the fields you mentioned (date, purpose, destination, etc.). Something simple that I can just tap when I start and end work trips would be perfect. Also, it's good to know the 2025 rates! That 67 cents vs 14 cents difference is just staggering. Really drives home why it's so important for @Giovanni and @Elin to push their organizations toward reimbursement policies rather than expecting employees to handle this as personal deductions that don't even exist anymore.

Great question about bundling expense categories! From my experience, I'd recommend starting with just mileage for your initial proposal. It's the easiest to quantify and track, plus it often represents the largest expense category for most non-profit employees who travel for work. Once you get mileage reimbursement approved and running smoothly, you can come back later with data showing "we reimbursed $X in mileage this quarter, and employees also incurred about $Y in parking/tolls that are directly related to those same business trips." This approach shows the board that you're being thoughtful and measured rather than asking for everything at once. Mileage is also the most defensible because there's a clear IRS standard rate - with parking and tolls, there might be more questions about what's "reasonable" or whether employees should have found free parking, etc. Keep it simple to start and build on your success! And you're absolutely right about many non-profits having outdated guidance. It's worth suggesting they update their employee handbook and orientation materials once you get the policy changed.

Absolutely use the full business rate (67 cents for 2025) in your records! Even though you can't deduct it now, you want to document the complete value for a few reasons: 1. If your non-profit does implement reimbursement, you'll have accurate records of what you're owed 2. If tax laws change after 2025 to restore employee deductions, you'll have proper documentation 3. It shows the true cost impact when you present your case to the board Your point about researching comparable organizations is spot-on. I'd suggest looking up the annual reports or financial statements of similar non-profits in your area - many post these online and sometimes include their expense reimbursement policies. You can also check GuideStar or Candid (formerly Foundation Directory Online) which often have detailed financial information about non-profits. When I made this argument to our board, I found three similar organizations in our city that all had mileage reimbursement policies, and that really helped frame it as "industry standard" rather than "new expense." The health center angle might actually work in your favor since healthcare organizations typically have very established compliance and documentation practices - you can tie proper expense reimbursement to overall operational professionalism. You're absolutely right that this creates an unfair burden. Mission-driven work shouldn't mean employees subsidize the organization's operations out of their own pockets!

This is such valuable insight from someone with non-profit finance experience! The compliance and liability angle is brilliant - I hadn't thought about how unreimbursed business expenses could create wage and hour issues, especially for staff who might be close to minimum wage thresholds when you factor in the out-of-pocket costs. The monthly reimbursement suggestion is really practical too. Our organization currently processes expense reports quarterly, which creates cash flow issues for employees who have to wait months to get reimbursed for anything. A monthly mileage process would be much more manageable for everyone involved. I'm curious - when you've seen organizations implement these policies, do you typically recommend they make it retroactive for a certain period, or just start fresh going forward? I've been tracking mileage for about 8 months now thinking I could deduct it, so I have detailed records, but I don't want to make my initial proposal too complicated by asking for back-reimbursement. Also, have you found that boards are generally receptive once they understand the tax implications, or is there usually pushback about the budget impact even when you show it's revenue neutral?