Clergy Housing Allowance
A Pastor's Home
Is More than His Castle
Clergy housing allowance is a tax deduction allowed by the IRS in the United States. It is based on the assumption that pastors do a lot of their work at home. And in my experience that's an understatement. Pastors receive and make countless phone calls at home. They also use their homes to study for sermons, read ministry related books, hold meetings, host both casual and formal get-togethers, provide meals, plan, pray, and counsel. So the IRS classifies a pastor's home similar to a home office. And it doesn't matter whether the pastor owns his home or it is provided by the church. You can call it housing allowance or parsonage allowance - either way there is tremendous tax savings offered in this provision. And the best part is, it doesn't cost your pastor or your church a single penny.
What Things Can Be Deducted?
The most challenging part of clergy housing allowance is learning what qualifies for the exemption and what doesn't. Here is a partial list of some things that may qualify. Be sure to consult a reputable
tax guide for details.
- Furniture
- Appliances
- Pictures and other decorations.
- Some cleaning supplies.
- Utility bills.
- Ministry related phone calls.
- Carpet cleaning.
- A dollar amount per meal served to church guests.
The actual list is far longer and much more detailed. But these few items give you an idea of what a pastor might be able to deduct as housing allowance.
How Do We Take Advantage of This?
Your pastor will have to keep records and receipts if he is to take full advantage of the parsonage allowance deduction. He has to be able to prove in writing that he did in fact spend what he says he spent. The church leaders, along with your pastor, also need to annually include a note in the official leadership meeting minutes about the amount of money your pastor believes he will spend on his home in the coming year.A reputable
tax guide can help you with issues about clergy housing allowance.
Where Do We Find More Information?
Many local tax consultants have a basic idea about this tax advantage. However, in my opinion, there is no better resource than Worth's Income Tax Guide for Ministers: 2008 EditionIt gives you all the answers and tells you all the what's and how's of clergy housing allowance.
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