Clergy can deduct the costs of ministry-related meals against their self-employment taxes, but not everyone knows the best practices for deducting meals. Here are some quick tips on deducting meals:
- Only deduct meals that are purchased for ministry purposes. If you are just buying a meal for yourself, that doesn’t count for a deduction. If you are purchasing a meal to discuss ministry matters with the church or during a visit to a parishioner, that can be deductible.
- Keep receipts. You do not need to attach them to your return, but you need to keep them in case IRS asks for proof. It is recommended to note the reason for the meeting and who you met on the receipt.
- Keep the receipts for six years. IRS normally recommends keeping tax returns and receipts for three years, unless there is an audit or issue with the return. The problem is that these audits can happen much later on, so it is safer to keep receipts and returns for six years before shredding.
- If you don’t like keeping all that paper, you can take photos, scan the receipts or enter them into a logbook. Choose a method that you will be most likely to use.
- If you are on a trip, you can only deduct meals if the trip is primarily for ministry-related purposes. If you are on a trip that mixes ministry work and vacation, then you may have pro-rate which expenses are ministry and which expenses are personal.
For more clergy tips and tax information, visit our blog at https://www.clergyfinancial.com/resources/blog/
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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