tax preparation

Pastors Tax Basics: Filing 2012 Taxes

If you are a pastor, then it’s a good idea to start considering tax preparation for your 2012 taxes. Pastors are faced with confusing rules when it comes to their tax status and how and when to pay their taxes. The U.S. government allows pastors to be considered as both employees and self-employed depending on a pastor’s individual situation. For this reason, pastors taxes must be planned carefully and discussed with a professional.

Here are some pastors tax basics if you’ve already begun getting your 2012 taxes together.

Tax Status

Due to the fact that pastors can be classified as… 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

Vehicle Deductions for Pastors

When it comes to tax preparation, appropriately deducting car expenses is an important aspect no matter what your profession, even pastors. If a pastor uses a vehicle for business and personal reasons, they are able to deduct the costs that are involved with the business use of that car. They cannot deduct expenses used for personal reasons including car payments.

A pastor must choose what vehicle deduction they prefer: a vehicle deduction using standard mileage rate or the business use percentage of actual costs. When it comes to vehicle deductions, pastors’ are encouraged to keep a mileage log for business… Continue reading

Tax Preparation: Tax Deductions on Business Gifts

When it comes to being a professional or owning a business, there are many circumstances that warrant gift giving. This also applies to clergymen. As a result, the IRS allows business owners including clergymen the ability to deduct expenses for small gratuities and gifts. Gifts given in a professional capacity are often given in order to build goodwill between a business or leader and clients, prospects, congregation, vendors, or employees.

When it comes to determining tax deductibility for these gifts, the IRS publications 535 and 463 outline the rules and guidelines but in general the dollar value of a gift… Continue reading

For a Smooth Tax Season Start Clergy Tax Preparation Early

As the end of the year approaches, so do thoughts of the upcoming tax season. In order for 2012 taxes to go smoothly, it often behooves us to start thinking and preparing for tax time before the year is over. This is especially true for church clergy. They have an array of interesting and complex tax issues that they need to decipher before tax season so it is often suggested that they start early on their taxes.

When it comes to clergy taxes, it’s important to keep good records of all business related expenses throughout the year. Rather than struggling… Continue reading

Tax Preparation for Ministers: Self-Employed vs. Employee

The life of a pastor can be difficult yet extremely rewarding. They have been called to minister to others therefore they do what they can to ensure that they are prepared  for whatever situations they are faced with. Until it comes to minister tax issues. These are issues that they must deal with but usually aren’t prepared for.

Many minister tax issues are hinged on whether or not they are considered self-employed or an employee of their church. The difference between the two makes a big difference when it comes to yearly tax preparation, as well as how deductions… 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

Gift Giving and Minister Tax Implications

Ministers do a great deal for their congregations. They offer an abundance of love, support and guidance for their parishioners, but above all else they teach and offer God’s love and words to those that need it most. For this reason, ministers often receive gifts from their congregation as tokens of their appreciation, these types of ‘love offerings’ often consist of cash or non-cash gifts and are often received throughout the year. These gifts are lovely sentiments, however, ministers need to keep in mind the minister tax implications that these types of gifts carry with them and how to properly… 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