Special to the Claton News Daily and Henry Daily Herald
WASHINGTON - U.S. Senator Johnny Isakson (R-Ga.) announced Thursday that he is co-sponsoring legislation that would help volunteers deal with rising gas prices by increasing the mileage deduction rate allowed for charity work.
"No matter where you look today, you can see the effects of out-of-control gas prices. It's not just the painful price of filling up the family car. It's the trickle-down effect these unprecedented prices are having on organizations that rely on volunteers to drive seniors to doctor's appointments or deliver meals to homebound individuals," Isakson said.
"Congress hasn't adjusted the mileage deduction for volunteers since 1997 when gas was $1.25 a gallon. Updating the tax code to reflect today's costs not only makes sense, but will encourage volunteers to continue providing these essential services in their communities."
Individuals who use their car to perform charity work are allowed to take a deduction on their taxes for each mile driven. However, the Internal Revenue Service does not have the power to make adjustments to the mileage rate for charity work. That rate, which is set at 14 cents, can only be adjusted though legislation.
Specifically, the Giving Incentives to Volunteers Everywhere Act of 2008 would amend the Internal Revenue Code to permanently increase the standard mileage rate for use of a passenger automobile for charitable purposes to 70 percent of the current rate for business usage.
In June, the IRS increased the mileage rate for business use from 50 cents per mile to 58.5 cents. Under this legislation, the IRS would have to increase the charitable deduction from its current level of 14 cents per mile to about 40 cents per mile. In the future, when the IRS makes new adjustments to the business rate, the charity rate would also get a proportional increase.
The legislation also amends the Internal Revenue Code to exclude from the gross income of charitable volunteers reimbursements paid to them for the use of a passenger automobile for the benefit of a charitable organization.