Mileage / My favorite

[RitaB]

Church A has started Mission Church B.  Same town.

 

My client is a member of Church A and is going to serve as pastor to Church B.  Church A will be his employer. He does no work at Church A.  He asked me if his miles from home to Church B and back were commuting miles.  I said, "Yes."  He agreed with me.  (What???)

 

Then he said that an accountant who's also a member of Church A said his miles from home to Church B and back would be business miles since he is an employee of Church A. 

 

I think not, but this accountant has letters after his name and was in business when I was a wee child.  What do you fine folks say?  And please limit answers to the question asked, not the other 36 possibilities.  Been a long day.

[kcjenkins]

I'm with you, Rita.  His "normal place of work" will be church B, no matter where the paycheck comes from.  Just imagine if that 'other accountant's logic was applied to Lowe's or Walmart, where the 'employer' is probably in another location for 99.999% of all employees.  

 

Since this is not a 'temporary assignment', church A is not his 'tax home', nor does it sound like the distance from A to B is significant even if it was a 'temp' assignment.  

[Catherine]

The accountant with the letter salad after his name could be correct IF there is an accountable plan.

 

Else I think it's commuting - but could not find a specific cite quickly.

[jklcpa]

Even if an accountable plan was in place, the situation Rita describes where the pastor is traveling from his home to his place of employment, that travel is commuting. If he actually worked at both A and B, after he'd go to one place, then the travel from the first place to the second would be deductible, but not a situation where he goes from home to only one of the locations.  I'd say there's no deduction.

[Catherine]

I agree with Judy -- even if he did not work at A, but was required to *report* there (for who knows what reason) on a daily basis, it *might* work with that accountable plan.  But that's not the case here.

 

No deduction.

 

If they pay him for the mileage regardless, then it has to go on his W-2 and be subject to employment taxes (which themselves might be different for clergy, depending on if he has opted out of SocSec).   So it's possible it still might be worth it to him - but at the lower income levels that clergy frequently have, check carefully for tax bracket bumping!

[RitaB]

I appreciate the comments, Ladies.  Yes, an accountable plan does not convert a personal expense to a business expense.  Church is not going to reimburse him for commuting miles, but If he were to be paid for driving to work, and as long as his combined SE + FIT rate is below 100%, it'd be a good deal.  There wouldn't be any credits lost because of increased income for him.

[Lion EA]

Two Ritas agree that traveling to work is commuting, no matter where the pay is issued from.  It's really a slam-dunk if he has only one place of work -- commuting.  As you say, there can be dozens of alternatives if a second workplace or temporary assignment or...come into play, but that's not what you posted.  Commuting.

[Jack from Ohio]

I agree with both Ritas. Commuting. The "accountant" at his church is probably not a tax professional.

[RitaB]

The "accountant" at his church is probably not a tax professional.

 

Actually, he is.  I'm not saying I'm a better tax professional than he is, but I'm a better tax professional than he is.

[Lion EA]

Two Ritas also agree on that.       (And, I have letters after my name, such as EA, MBA, and OLD LADY.)

[BulldogTom]

I have a salad list too....MST, EA, BS, CFO....I can make up more if you want.

 

Why would you doubt yourself Rita when a MAN with a Salad list of letters says something.  When have you ever listened to what a man says.

 

You got it right.

 

Tom

Hollister, CA

[DANRVAN]

Unfortunately, like other professions we have our share of quacks.  But I would not judge the accountant without knowing exactly what the conversation was between him and the church employee.

 

The real proof comes when you see the quality of  their work. Mistakes can come from a lack of knowledge or quality control. I recently amended a return where the other CPA apparently did not know that 1231 gains count as business income for Section 179.  He also missed the fact that the farmer's insurance expense was understated by about $4,000 and did not follow the regs for a multi-asset 1031 exchange.

 

The amended return netted the client about $20,000 and just went through audit.  The only audit adjustment was disallowance of cell phone expense.