clergy tax

Tax Breaks on Minister Taxes

Accounting for tax breaks when figuring and submitting minister taxes can be quite complicated. The government has allowed for a number of tax benefits for members of the clergy that are not available to taxpayers outside of the clergy. These tax breaks were originally created to help members of clergy who were poorly paid. There are actually a number of lucrative exemptions that ministers should be aware of including a housing allowance that can reduce a minister’s tax burden quite effectively.

Here are some common tax benefits that ministers have access to as long as certain IRS qualifications are met.… Continue reading

Clergy Tax Tips: Keeping a Vehicle Mileage Log

As mentioned in a previous blog post in regards to pastors claiming their car payments as tax deductions, a pastor must choose what vehicle deduction they prefer: a vehicle deduction using standard mileage rate or the business use percentage of actual costs. Therefore, when it comes to vehicle deductions, pastors are encouraged to keep a mileage log for business use that includes total miles.

Current tax law requires proper record-keeping when it comes to deducting business use of your vehicle and if a pastor chooses vehicle deductions based off of standard mileage, consistent logging of mileage will save them time… Continue reading

Clergy Tax Services: The In’s and Out’s of Medical Insurance for Pastors

Medical insurance is an important topic for everyone, this includes those in the ministry as well. It has been cited as a major factor in most family’s financial health and pastors and clergymen are no exception to this. When it comes to clergy finances, medical insurance plays a big role. Fortunately, for pastors there are a number of alternatives available that allow pastors and their families to have affordable and quality medical coverage.

Here are a few options when it comes to medical insurance for pastors.

Group Coverage

Group coverage plans are often available for multi-staff and denominational churches and… Continue reading

Determining Housing Allowance on Minister Taxes

There are a number of tax exemptions that ministers can benefit from as long as ministers are aware of these exemptions. One of the most common is a tax exempt housing allowance. All expenses for housing which includes furniture and maintenance can be deducted legally. Here is how to determine if you are eligible and how to go about it. 

Determine Eligibility

A minister is defined by the IRS as a person who is “duly ordained, commissioned, or licensed minister of a church.” Religious employees that don’t have these credentials are not eligible for the housing allowance.

Deductions

Once… Continue reading

Claiming Car Payments on Pastors Taxes

When it comes to deductions on taxes, the list can be long and varied depending on your occupation. This is especially true when it comes to pastors taxes. Items such as medical expenses, mortgage interest and travel expenses usually top the list. However, car payments are another standard deduction that should be kept in mind when preparing clergy tax forms.  

Business use of a vehicle is a deductible expense that can be claimed on a tax return for pastors. Members of clergy that use a vehicle for both business and personal use can deduct the cost associated with business… Continue reading

Tax Preparation for Missionaries

Serving God and spreading the Good News often requires going outside of your comfort zone and even overseas in order to spread the Word. If God is leading you to teach the masses as a missionary, it’s necessary to consider everything that being a missionary entails which also includes proper tax preparation.

According to IRS Tax services, missionaries fall under the definition of ministers. Ministers and missionaries both are people that are considered ordained by a licensed religious group to conduct religious worship, administer ordinances and follow a church’s prescribed system of beliefs. Therefore a missionary is responsible for filling… Continue reading

Pulpit Freedom Sunday Questions Clergy Tax Laws

According to an October 2 Huffington Post blog, nearly 1000 pastors from around the country will have taken on the IRS on Sunday, October 7 by participating in “Pulpit Freedom Sunday”. One of the major aspects of clergy tax code is the fact that churches are considered tax-exempt. However, pastors across the country believe that their voices are being silenced politically due to that status.

Currently under the Johnson Amendment, tax-exempt organizations, which include churches, are not allowed to endorse any candidate running for elective public office. Therefore, the questions behind the creation of “Pulpit Free Sunday” is whether or… Continue reading

Clergy Tax: Deductions for Pastors

In many cases clergymen are considered both an employee of the congregation as long as they are paid by a salary from the church. They may also be considered self-employed if additional tasks are performed that are outside the regular duties outlined by the salary agreement.

When it comes to clergy tax, if a pastor chooses to itemize deductions, there are certain deductions that they are entitled to including:

Work Expenses

A number of expenses can be incurred when performing the duties of a pastor. To properly itemize these deductions an IRS form 1040, Schedule A needs to be submitted.… Continue reading