Is your Gift Taxable?
If you’ve given money or property to someone as a gift, you may owe federal gift tax, but in many cases, you will not. For example, there is usually no tax if you make a gift to your spouse or a charity. If you make a gift to someone else, the gift tax usually does…
Minister’s Spouse & Family Travel Expenses
During the summer months, ministers and their families often travel together. Sometimes a minister is able to combine a trip that is partially for vacation, and partially for a legitimate business purpose, such as attending a ministry-related conference or seminar. As long as the portion of the travel that is legitimately for business purposes is…
Don’t Miss These 3 Tax Deductions!
Top three Tax Issues for Ministers There are three unique aspects to a minister’s taxes. A minister occupies the unusual status of being a dual-status taxpayer. He/she is considered an employee for income tax purposes and self-employed for social security and Medicare. One implication starts the day he becomes employed as an ordained minister. The…
Paid Preparer or DIY Software?
Tax Software For Ministers A frequent mantra that I often repeat is “Minister’s taxes are not hard, they are just different.” Of course, easy is a relative term. For us, many tax returns are not difficult because we have prepared thousands of minister returns. Most people, including many preparers, do not know the differences…
Are Moving Reimbursements Taxable?
The approaching summer season is often a time of transition. During this time of year churches frequently hire new employees who relocate to serve the church. Ministers and other church employees sometimes find new opportunities and make a change during the summer months, between school years. Coming out of the disruptions caused by COVID-19, many…
Reminder – Estimated payment Due on April 15th
Notice 2021-21, issued on March 29, 2021, does not alter April 15, 2021, deadline for estimated tax payments; these payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to…
Charitable Contribution Bundling
Charitable Contribution Bundling Recent changes in the federal tax code have raised the amount of the standard deduction compared to past years. At the time of this writing, the federal standard deduction is $12,400 per year for single taxpayers, and $24,800 per year for married couples. One of the implications of claiming the standard deduction…
Ministers Versus Non-Ministry Employees
Ministers Versus Non-Ministry Employees Churches should make a careful distinction between their paid workers who are acting as ministers versus those who are non-ministry employees. There are several considerations that can only apply to those who qualify as “ministers.” First, ministers can receive a clergy housing allowance, if properly designated, which shields a portion of…
Surviving spouses not eligible for housing allowance
The housing allowance exclusion is available only to ordained clergy-not to surviving spouses. The tax return for the year in which a clergyperson dies may include, as an exclusion from the gross income of the clergyperson, a housing allowance exclusion for the full period of time the clergyperson was alive. That is, the death of…
Housing – Fair Rental Value Limitation
In 1971, the IRS issued a Revenue Ruling which imposed the third factor upon clergy who own their own home: the amount excluded from gross income cannot exceed the fair rental value of the housing. This rule was added to Code section 107(2} itself in 2002. According to the above-referenced Revenue Ruling and current publications…
