In general, the fair rental value of the property is a question of facts and circumstances based on the local real estate market. If the pastor rents his or her home, the amount of the rent would be presumptive evidence of the fair rental value. Obtain the current fair rental value of your home from…
Have you paid off your mortgage? You may be able to exclude from your gross income other eligible housing expenses directly related to providing a home. Qualifying expenses include utilities, repairs, improvements, furnishings, property taxes and insurance. Any additional mortgage that does not apply to improvements on your home cannot be excluded from gross income….
A housing allowance is one of the greatest tax benefits available to clergy today.
The housing allowance exclusion is available only for qualified “ministers of the gospel.” The term “minister of the gospel” includes ministers, priests, and rabbis, i.e., those who have been ordained, commissioned or licensed by a church and who perform certain duties or services. These duties or services generally include the performance of sacerdotal functions, the…
Social security benefits are financed through two tax systems. Employers and employees each pay the “FICA” tax, which for 2007 amounts to 7.65% of an employee’s taxable wages (a total tax of 15.3%). Self-employed persons pay the “self-employment tax,” which for 2007 is 15.3% of net self-employment earnings. Clergy are always considered to be self-employed…
Ministers can arrange to have income taxes (but not social security taxes) withheld from their compensation by means of voluntary withholding agreements with their employers. If the employer agrees to such an arrangement, the minister must furnish the church with a Form W-4, and the church will then withhold on the basis of the standard…
UPDATE 10/21/10: The IRS has announced that the health care reporting requirement will be optional in 2011 and mandatory in 2012. From the IRS “to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with this requirement, the IRS will defer the reporting requirement for…
In today’s economy, setting up a church budget can be a challenging task. The 2010-2011 Compensation Handbook will help make sure your church staff will be fairly compensated.
In the case of a taxpayer using more than one property as a residence, whether property is used by the taxpayer as the taxpayer’s principal residence depends upon all the facts and circumstances. If a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer…
Six tips to help taxpayers find the right clergy tax professional.
