Ministers who live in the same home for a long time may reach the point where they are paying off their mortgage. At this point, many ministers wonder how not having a mortgage will affect their housing allowance.

Fortunately, you can still qualify for the housing allowance if you have paid off your mortgage. However, if you are not paying a mortage, your housing expenses for the year are going to be drastically less. IRS limits the housing allowance to the lesser of three categories, one of which is your actual expenses. So if you designated $20,000 of housing allowance, have a fair rental value of $30,000 and you only spent $10,000, you would only get to exclude $10,000 of income from income taxes.

From first call to retirement, from buying a home to paying it off, Clergy Financial Resources serves Ministers at all points in their career. If you are looking for a 1040 preparer, visit our website at

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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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Maple Grove, MN 55369

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