Can we pay for gym membership for church staff?
You can, but it would need to be considered as extra taxable income. Gym membership dues are considered a personal expense. There is no tax law that excludes employee or employer paid third-party membership dues from taxable income. The only time the value of membership dues are excludable from income is if the employer provides…
How Should I Get Reimbursed?
While working for a Church, you may have to pay some expenses out of your own pocket. This could be things like paying for gas while you drive to a distant location, or paying for office supplies, or paying for laundering ceremonial garments. Regardless of the expense, when you get reimbursed by your Church, you…
IRS Releases 2019 Standard Mileage Rates
The Internal Revenue Service (IRS) released the 2019 standard mileage rates. Beginning January 1, 2019, the standard mileage rates for the use of a car (vans, pickups or panel trucks) will be: 58 cents per mile for ministry or business miles driven, up from 54.5 cents for 2018 20 cents per mile driven for medical, up from…
Guide to Minister’s Compensation
You may find it helpful to begin by considering the goals of a compensation package. A church should provide its staff with adequate income so that they can fulfill their roles without undue concern about current and future financial needs. Freedom from financial anxiety lets the minister focus on his or her service. It also helps your church…
Flat-dollar Reimbursements Taxable
Question: Employees often use their personal cell phones for church business. The church requires that they submit monthly expense reports and they’re reimbursed through an accountable plan. The church board wants to ditch the paperwork and just pay flat-dollar allowances to employees every month. Would that be taxable? Answer: Yes, the allowances would be taxable because…
How To Create A Cell Phone Reimbursement Policy
Creating a policy for employee mobile phone reimbursement can be tricky. Unlike the rules surrounding other ministry expenses, IRS regulations governing employee cell phone use are ambiguous and in a state of flux. To date, no single model of cell phone reimbursement has become an industry norm. Churches need to carefully consider the model through…
Commuting vs. Ministry Miles
Commute miles are from your home to your first ministry location and from your last ministry location to your home. Multiple trips you make throughout the day to your home are also considered commuting. Returning to the church from home for an evening meeting (such as a board meeting) would be considered commuting. Driving to…
New Changes to the Employee Business Expense Deduction
Prior to the Tax Cuts and Jobs Act, which went into effect, January 1, 2018, unreimbursed ministry-related expenses were generally deductible on the minister’s individual tax return as a miscellaneous itemized deduction (Schedule A) if they exceeded 2% of an individual’s AGI. Starting in 2018, these deductions will be eliminated for tax years through 2025. This includes unreimbursed…
Clergy Mileage Reimbursement or Auto Allowance
Mileage Reimbursement/Auto Allowance A church and its pastor(s) can work together to maximize the reimbursement of professional expenses, which are typically paid out–of–pocket with after–tax wages by the pastor. These expenses can include mileage, cost of periodicals, books, professional supplies, conferences, etc. Using methods that meet the IRS requirement for “Accountable Reimbursement” plans, a pastor can…
What should I know about Ministry Expenses
If you paid for ministry-related expenses out of your own pocket, you may be able to deduct those costs. You can only deduct unreimbursed ministry expenses that are ordinary and necessary to your ministry as an clergy employee. An ordinary expense is one that is common and accepted in your industry. A necessary expense is…
