Do I still need to track Medical Expenses?
In 2018, there were two hurdles to claiming a Medical Expense Deduction. First, you had to spend more than 7.5% of your adjusted gross income on medical expenses. If you had a combined income of $100,000, you would first have to spend $7,500 on medical before you could claim any expenses. And that’s unreimbursed medical…
IRS extends deadline for Severe Flooding in Iowa
The IRS recently announced that tax return filing and tax payment deadlines have been postponed for victims of flooding and severe storms in parts of Iowa. If you are a resident of Fremont, Harrison, Mills, Monona or Woodbury County in Iowa, the IRS has extended tax filing and payment deadlines. This includes the 1040 filing…
Court Upholds Clergy Housing Allowance
Federal Appeals Court Upholds Clergy Housing Allowance On Friday, March 15, 2019, the Seventh Circuit Court of Appeals ruled in favor of the clergy housing allowance. In a unanimous 3-0 decision, the judges ruled that the housing allowance is constitutional and cited two legal precedents in support of their ruling. This is a tremendous victory…
Moving Ministries?
A new Call can be exciting, but the logistics of moving and setting up in a new location can stressful, even before thinking about your taxes. Here are a few things to consider when moving to a new location. Moving Expenses are not deductible Regardless of whether your Ministry pays you or pays the movers…
Home Ownership Deductions Limited for Itemized Returns in 2018
For those who continue to itemize their deductions, the Tax Cuts and Jobs Act (or TCJA) has installed several limits on deductions for home owners. First, taxpayers can only deduct mortgage interest resulting from up to $750,000 of debt ($375,000 for those filing single or married filing separately). IRS Publication 936 summarizes the limitations (https://www.irs.gov/publications/p936#en_US_2018_publink1000229991),…
Miscellaneous Itemized Expense Deductions Cut in 2018
The Tax Cuts and Jobs Act is changing a lot this year, for better and for worse. One of the bigger changes to 1040 returns is the loss of miscellaneous itemized expenses on Schedule A. What sort of things are included in miscellaneous itemized expenses? Here are some examples: Tax preparation fees Investment fees Safety…
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…
Clergy Housing Lands in Seventh Circuit
Churches and the IRS joined forces Wednesday before a sympathetic Seventh Circuit panel to argue that a 65-year-old income tax housing exemption for clergy members does not violate the Constitution’s Equal Protection Clause. “The court has to take history into account,” said attorney Luke Goodrich of the nonprofit law firm Becket, a public-interest firm representing…
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…
IRS Increases Annual Gifts Tax Exclusion
For starters, you can give gifts valued up to the annual gift tax exclusion amount each year without ever touching the lifetime exemption. For 2017, the exclusion was $14,000 per recipient. In 2018, it increased to $15,000 per recipient. The federal gift tax applies to the giver of a gift, not the recipient, for amounts…
