Pastor's Salary Package breakdown

[northside]

I was wondering how you guys handles a pastor's package breakdown if he doesn't use all the money in his mileage? Do you add that back into his salary before the end of the year? He broke down his total package price from the church at the beginning of the year but has not used all of his mileage.

[NeilZ]

I was wondering how you guys handles a pastor's package breakdown if he doesn't use all the money in his mileage? Do you add that back into his salary before the end of the year? He broke down his total package price from the church at the beginning of the year but has not used all of his mileage.

In order to stay within the IRS rules for reimbursements, mileage reimbursements need to have some sort of record of miles used. If the mileage allowance is not totally used up, the remainder is not a reimbursement but a taxable income. You will need to adjust his final gross income on the last check to cover any such remainder so it will be properly recorded on the W2 for when the pastor files taxes.

[northside]

He has given me a mileage record every month, but this is first year and my first year so we guessed at the mileage. If I understand you correctly, I will write him a check for the reminder and put that amount on his w2 under taxable wages. Is that correct?

[NeilZ]

He has given me a mileage record every month, but this is first year and my first year so we guessed at the mileage. If I understand you correctly, I will write him a check for the reminder and put that amount on his w2 under taxable wages. Is that correct?

That is correct. You could include the amount in his gross salary for the last check, and that will also work.