Is Interim Ministry Mileage Deductible?
Q: I am an interim minister serving a church 100 miles away. This interim position will last less than a year. I know that driving between home and church is not deductible, but would this situation count as temporary employment so that I would be eligible for the standard mileage deduction? A: Commuting between your home and a…
Home Loan Between Church and Minister
Many churches help their ministers get into a home by providing money for a down payment. These funds can be a taxable gift and become taxable income in the year they are received and may be designated as housing allowance or the congregations may elect to assist a minister with the purchase of a home by means…
Missed the Tax Return Deadline?
The tax deadline for most clergy was Tuesday, April 18, 2017. We have some advice for those who missed the filing deadline. File and pay as soon as possible. Clergy who owe federal income tax should file and pay as soon as they can to minimize any penalty and interest charges. There is no penalty for filing…
Fair Rental Value Limitation
Currently, IRS has no written procedures concerning the method or frequency for determining this value. In its Audit Technique Guide for Ministers, the IRS tells its agents that determining the fair rental value of a parsonage “is a question of all facts and circumstances based on the local market . . .” It also suggests…
Donating cash to a church
The IRS has various record-keeping and documentation requirements, depending on the amount of cash you donate to a church. Whenever you make a cash donation to your church, you must retain either a receipt, canceled check or a bank or credit card statement. It’s not necessary for you to send these to the IRS, but…
What Qualifies as Housing Expenses?
Common eligible expenses include mortgage payments (principal and interest); rent payments; real estate taxes; property insurance; utilities (gas, electricity, water, sewer, garbage pickup, local telephone service); appliances and furniture (purchase or rental cost and repairs); remodeling expenses; homeowners’ dues; and pest control. Any expense to maintain and furnish a home. Cleaning services, food, domestic help,…
Health Reimbursement Plans are Back!
On December 13, 2016, President Obama signed the 21st Century Cures Act, which goes into effect on January 1, 2017. This law allows small churches to set up a QSEHRA to contribute toward your employees’ healthcare costs. This plan is now available through our website. Click Here to Order. If your church (with less than 50…
Should the Church Designate a Parsonage Allowance?
If a church provides a parsonage, the church should assume all costs for maintenance and utilities. These costs may be paid directly or the pastor may be given a parsonage allowance sufficient to cover these expenses. In addition to these costs, the church should provide and maintain major appliances in the parsonage. Pastors who live in an unfurnished…
Can The Church Pay My Social Security tax?
Churches are required to pay FICA (Social Security and Medicare) taxes for all non-clergy employees. The IRS considers clergy as dual status employees which are subject to SECA tax for social security purposes. Due to this status, the church cannot pay FICA tax for clergy. Many compensation packages have an extra taxable line item labeled…
Extension season has started
We are always interested in working with new clients. As tax returns continue to arrive in our office daily, they are completed in the order they are received. Our hope would be to complete all the returns in our office by April 18th. However, we know that we’ll need to file extensions for some. If you…
