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It is officially tax season!
With US tax returns due April 15, please note the information about our new tax preparer, Village Tax Services. That information has been republished in the final article of this newsletter for your convenience, and we’ve added simple three-step instructions if you want them to handle your 2024 tax preparation.
A Resource to Keep in Mind.
Remember that there is a valuable resource on the GMC called the “Expense Categorization Listing.”
This helpful document lists almost any type of expense you can think up, and it explains whether that expense is personal, reimbursable, or compensatory. And best of all, it is searchable. Once you’ve called it up, just press <Ctrl>-F (for “find”) and type in the word that best describes your expense. You should be able to find it and know how to handle that expense.
This newsletter is also published on the GMC for future reference. We know that you have much going on and that keeping up with what is happening in Finance may be another item on a never-ending task list. Thank you in advance for taking some time to read these announcements and for the important work that you do every day. Our hope with sending you this information is not that you become an expert in WV financial matters, but that you are informed of changes that impact you directly, and that you know where to turn if you need help. It is our pleasure to serve alongside you!
More Information Needed on Expense Reports
Please be aware that as we tighten up our compliance with IRS rules and financial best practices, our Accounts Payable department will be asking for more information for many reimbursement requests. In particular, whenever another person is involved, such as for a meal or a compassion grant, the following information will be needed:
Please try to provide these data points in your initial submission so that AP can process your reimbursement the first time, rather than having to write back and request it. It will save both you and the Financial Services team time and effort. Thank you!
Meet the New Finance Personnel
We’ve already announced our new Finance staff, but just to remind you, here are the personnel serving you in Finance that are new as of last year:
Please send us any feedback you have about this newsletter. We want this tool to be as useful to you as possible. Email us at FinanceHelp@worldventure.com.
Soraya Marin – VP/Chief Operations Officer
Fabian Perea – Treasurer
Reda Edelen – Assistant Treasurer
Luke Oravec – Deputy Treasurer (part-time)
Christina Segura – Senior Staff Accountant, Europe/MENA & Americas
Dan Penney – Staff Accountant, Africa & Asia
Kriss Reese – Financial Services Manager
Mary Ackermann – Financial Services Specialist
Becky Binuya – Financial Services Specialist
Renee Chase – Financial Services Specialist
Robin Hall – Financial Services Specialist
You didn’t miss it!
There have been no announcements published in the “Discussions” tab of the GMC by Finance within the last three months, so you can rejoice that you’ve missed nothing (at least from that source).
Let’s start with a true story. Several months ago, a Global Worker wrote us with a legitimate complaint. She said her total commitment amount in our system (and therefore her support percentage that is based on it) was inaccurate because she had several commitments on her active commitment list whose status was “Errored” and were no longer being paid. These errored commitments never went away or were corrected, and so a number of them had collected, representing a significant total. Because payment on them had ceased when they were errored, she had significantly less support coming in than our system claimed. She wanted to know what her accurate commitment level was, and she asked if we could fix the problem of these errored commitments continuing to show on her commitment report and being counted in her commitment total.
What Is an “Errored” Commitment?
Before we continue our story, let’s back up and explain what an “errored” commitment is. A commitment is automatically flagged as “errored” by our system if an attempt to fulfill an automatic payment on it fails. This only happens with credit card or electronic payments that have been set up to rebill automatically. The most common reason for an “errored” transaction is when the credit card has expired and the donor neglected to provide us with the new credit card information. If the credit card is no longer valid, the transaction will be rejected by the credit card carrier, and the commitment is then flagged as “errored” because the payment attempt returned an error code rather than a payment.
The Problem Revealed
All of that is normal and should happen that way. But our worker’s question revealed that once a commitment has been “errored,” our system was not managing them as we needed it to. No notification was being sent to anyone about these errored commitments, and no further action was being taken, automatically or otherwise. They weren’t even showing up in the Commitment Action Report. As a result, errored commitments were simply building up over time and continuing to be treated as “active”—that is, they were being counted as if they were still being regularly paid by the donor.
So we made some modifications to our software to better manage errored commitments. There are several things that now happen when the payment on a commitment returns an error. The commitment is immediately flagged with status “Errored,” just as before. But at the same time, a notice is sent to our Receipting Team and they attempt to contact the donor to let them know their payment method has failed and needs to be renewed. Hopefully, this communication succeeds and the commitment is reactivated with a renewed payment method. If so, all is well and nothing more needs to be done.
At the same time as that notification goes out—whether or not the Receipting Team is able to contact the donor—an email is automatically sent to you, the worker, to apprise you of the errored commitment. This is so that you know that one of your donor’s payments has ceased and you may want to contact the donor yourself to determine what happened and make sure the donor knows to update their payment method so that their support for you is not interrupted. In addition, all “Errored” commitments will show up in your Commitment Action Report, allowing you to track and manage them on an ongoing basis as needed.
A Happy Ending
However, if all that fails—that is, if the commitment remains “Errored”—other steps are automatically taken by the system. After the normal payment grace period, any commitment that remains “Errored” will be converted to “Suspended.” During the brief period that a commitment is “Errored,” it will continue to be treated as if it were “Active” and will count in your commitment total. But unlike before, it no longer remains errored forever. Once the normal grace period for non-payment has been reached, an errored commitment will be flagged as suspended and removed from your total commitments.
So now you know what it means when you see an “Errored” commitment on your Commitment Report or on your Commitment Action Report. And you can also rest assured that such a commitment will not remain that way. Eventually, if not renewed within the grace period, it will be suspended and removed from your support calculation so that your commitment total and your support percentage remain accurate.
So this story has a happy ending, as well as a moral, which is: don’t hesitate to write us and ask about anything that doesn’t seem right. We’re here to assist you, and it may even end up generating an improvement to our systems or procedures that are designed to support your efforts in building the kingdom!
Please note that we covered “Part 1” of this question in our last newsletter, so if you haven’t read that—and especially if you need to know about getting reimbursed for a leased vehicle—please browse to the Oct-Dec 2024 Finance Newsletter to find that article. (You can access previous newsletters by clicking on the drop-down menu—called “Previous Editions”—located at the very top right of any newsletter.) This article addresses the reimbursement of a rented vehicle, because the rules are different from those for a leased or owned car. Please also see the previous article for the precise definitions of “leased” versus “rented”; the difference is in the nature of the contract, not the length of the term.
Once again, the answer to the question of whether you can get reimbursed for a rental car is not a simple yes or no. Well, the answer is yes, but there are two different scenarios, and they are treated very differently.
Scenario #1: Ministry Use Only
Scenario #1 is quite simple. If you use your rented vehicle solely for the purpose of ministry, then 100% of the costs associated with the rental are reimbursable. That includes the rental fee, fuel, and insurance if that’s necessary (for rentals within the US, we recommend you use WorldVenture’s insurance policy to insure vehicles rented for ministry purposes rather than purchasing the rental company’s insurance[1]). In the case of a ministry use only rental, simply request reimbursement for the total costs of the rental, supplying receipts for any expenses over $75.
Scenario #2: Mixed-use Rentals
Scenario #2 is where things get a little complicated. This is the situation where the rented vehicle is used for both personal as well as ministry purposes. Unlike a lease, or even a privately owned car, requesting mileage reimbursement for work-related miles is not allowed.
Note that this represents a change in policy by WorldVenture. Based on recent research and in accordance with IRS regulations, we will no longer reimburse 100% of the costs of a rental car if any personal use is involved. Going forward, we will reimburse only the “business-use portion” of the expenses of a rented vehicle.
Now remember that we also just said that one cannot be reimbursed for mileage on a rented vehicle, meaning you cannot simply expense ministry miles at the standard mileage rate as you can with a leased or owned vehicle. This leaves only one option for being reimbursed for work-related use of a rented car when there is mixed use involved. To get reimbursed for ministry use of a mixed-use rental car, one must track the mileage used for each purpose and then split the total expenses of the rental based on the percentages of miles for each purpose.
To see how this works out, let’s take a simple example. Let’s say you go on Home Assignment for two months. That’s not enough time to make it worth purchasing a vehicle. It’s also too short a time for a car lease. So you rent a car for those two months. Obviously, with the rental car as your only vehicle for two months, you will be forced to use it for personal reasons some of the time (to buy groceries, attend your home church, possibly some vacation, etc.). But most of the use will be for your home assignment ministry, so you want to get reimbursed for that.
What’s necessary is to track all miles used for each purpose so that you know how many miles were ministry versus how many were personal. (There might be an app for that, but a written log works great.) Let’s say you drive the car 10,000 miles during those two months, and 8,000 of those miles were for ministry (visiting churches, supporters, etc.). This means you’ve used 80% of the total miles for work-related purposes, and 20% for personal. Thus, you would submit an expense reimbursement request for 80% of the total costs of renting the vehicle throughout those two months. So while you are not allowed to submit those 8,000 miles for mileage reimbursement at the standard mileage rate, you will use that percentage of the total miles to get reimbursed for that same percentage of the overall costs of renting the vehicle (which can include fuel, insurance, etc.).
Two More Implications for Mixed-Use
There are two more issues to be aware of under scenario #2. The first is documentation. If you want to be reimbursed for the percentage of ministry use on a mixed-use rental vehicle, you must document both your miles and the total cost of the rental. This involves at least two pieces of documentation. One is a copy of the rental contract, which should show the rental fee and the length of the term. The other is either a mileage log for the entire duration of the rental contract, or in the case of shorter rentals, you can supply Google maps of your ministry trips in lieu of a mileage log. The maps should show the mileage from point A to point B for each ministry-related trip and indicate whether it was one-way or round trip (this can be a written note on the map). WorldVenture will need these two forms of documentation to reimburse you for ministry-related expenses of a rental vehicle, if the rental involves mixed use.
The final issue with scenario #2 is the grace period for submitting your reimbursement request. As everyone hopefully knows by now, expense reimbursement requests must be submitted no later than 90 days after the date that the expense is incurred (after 90 days, even legitimate reimbursements are automatically converted to compensatory payments instead of true reimbursements). However, this presents a unique challenge for reimbursement requests for mixed-use rentals. Since you must know both the total cost for the entire rental period as well as your total miles for ministry and personal usage throughout the whole rental period, you cannot submit your reimbursement request until the term of the rental period is completed and you’ve returned the car to the rental company. Due to this unavoidable constraint, WorldVenture will begin the 90-day clock on the drop-off date of the rental period. That is, in the case of mixed-use rental vehicles only, you will have 90 days from the day you drop off the rented car back at the rental company to submit your reimbursement request. This includes all rental-related expenses within this time frame: rental fee, fuel, insurance, etc.
As always, if you have questions about any of this, don’t hesitate to drop us a line at FinanceHelp@worldventure.com. Happy car renting!
[1]For vehicles rented in the United States for ministry purposes, the rental can be covered by WV insurance. In the event of an accident, WV insurance will cover the cost of repairs, and the deductible will be charged to the missionary’s support fund.
Since we are now in tax season for the US, and April 15 is fast approaching, we wanted to republish the information about WorldVenture’s new tax preparer. The letter below is from Loren Gill, our contact at Village Tax Services and was published in our last newsletter. This is a “rerun” to make sure you can easily find this information.
Important…
Loren recently sent us these simple three-step instructions to pass on to you if you want them to prepare your 2024 taxes:
Information contained in this newsletter is intended for internal use by WorldVenture workers, staff, approved volunteers, and board members. Unauthorized distribution to other parties is not permitted without permission from Finance leadership.