Ministry Mileage

Ministry Mileage Documentation of expenses is vital to an acceptable accountable reimbursement plan. Pre-Covid, ministry mileage driven is generally the minister’s greatest expense. Some ministers have contended that every mile they travel is in the furtherance of their ministry – and thus reimbursable. Their contention is based upon the fact that they never stop being a…

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Retirement 403(b) Plans for Ministers

Retirement 403(b) Plans for Ministers While it is true that ministers, and other church employees, may earn less than those performing similar jobs requiring similar skills in the secular world, there are unique tax advantages that can help offset the compensation differences. One of the greatest advantages for church workers is the 403(b) retirement plan….

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4 Reasons to Donate Stock to Church

If you’ve ever donated to a nonprofit, you’re probably familiar with cash giving — you write a check or make a credit card payment, and your money is put to work supporting the causes you love. But did you know that cash isn’t the only thing you can donate to charity? Many donors are choosing…

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Safeguarding Form 4361 – Opting out of Social Security

Safeguarding Form 4361 – Opting out of Social Security  A minister who wishes to be exempt from social security/Medicare tax must file a Form 4361 with the IRS for approval. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the exemption…

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Mid-Year – Housing Allowance Review

Mid-Year Review of Housing Allowance Designations Perhaps the most beneficial tax benefit available to a minister is the clergy housing allowance, which allows a minister to exclude permissible housing expenses from taxable income. Now that that the current year is more than half over, it is a good time for churches and their ministers to…

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Is a Minister’s Outside Income Taxable?

Is a Minister’s Outside Income Taxable? When a minister’s income is reported on a year-end W2 or 1099, it is straightforward that the income is taxable and must be reported as such. However, it may be less clear to a minister if other forms of income should be reported as taxable. A minister may receive…

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Reporting ministry expenses and/or declare a housing allowance for interim positions

How should I report ministry expenses and/or declare a housing allowance for interim positions. This situation presents unique issues, especially for retirees who are receiving a pension. The differences in tax treatment depend on the length of the interim position, and taxpayers are advised to consider them carefully: Interim position of one year or less…

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Three key tax provisions that apply to clergy

The three main key tax provisions that apply to clergy: Self-employment tax Clergy are not eligible to have FICA taxes withheld from their church compensation. In lieu of FICA taxes, clergy pay self-employment tax, also known as Self-Employment Contributions Act tax (SECA). Reimbursements from an employer of SECA are taxable as wages. However, even though…

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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…

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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…

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