Most of the time, clergy get reimbursed by their church for any ministry/business expenses they pay for themselves. As a result, the IRS looks carefully at unreimbursed ministry/business expenses.
Many items are potentially deductible, including dues and license fees, subscriptions to subscriptions and publications related to your ministry, supplies, and professional clothing. Yet the temptation among many taxpayers is to try to deduct additional items that are only somewhat connected to their jobs. Before taking this deduction, make sure the expenses you’re seeking to claim are legitimately ministry/business-related, and be prepared to explain in an audit why your church didn’t reimburse you for them.
Finally, bear in mind that any deduction could lead to an audit if it’s unusually large compared to what most people report on their tax returns. If you’re entitled to a big deduction for any reason, make sure you have the records to prove it in case the IRS comes knocking.
Getting audited is no fun, but as long as you have the required documentation, you should be able to stand up to IRS scrutiny with your deductions intact. Keeping good tax records with this deductions in particular is a smart move that will keep you from paying extra tax after an audit.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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