Quick Answers

"Not only will you know you’re handling everything right…you just might walk away saving a lot of money, too. "Nelson Searcy, The Journey Church, NYC

 

Information is Golden

There’s a gold mine of experience, expertise and knowledge in these resources. But keep in mind, that while we’d love to provide a quick answer to all your clergy tax questions; there are always caveats with tax rules. The most valuable tax-planning advice is always personal tax-planning advice.

None-the-less, these articles contain hard to find information for ministry professionals shared with the intention of showing you just how powerful your clergy tax advantages are. Very likely, you’ll find something here that even you didn’t know about your unique tax benefits.

So call us and get personal, we’d love to talk taxes with you!

Housing Allowance

How to Calculate Gross Income with Clergy Housing Allowance

Why do minsters have a gross income that is different for Affordable Care Act (ACA or Obamacare) and Medicaid? We get a lot of questions about how to calculate gross income for ministers. This is a common area of confusion for pastors who are applying for medical insurance on the Marketplace. Once they find their... View Article

Who Qualifies for Housing Allowance & Ministry Tax Status

It may surprise you to learn that the IRS interprets guidelines for ministry tax status more liberally than many churches. A Common Myth It’s not true that one must be ordained to qualify for housing allowance. Denominations have their own standards to determine who will qualify for ministry tax status and the IRS recognizes those... View Article

Legitimate Housing Expenses

Congress intends that all expenses related to running and maintaining a home are eligible as housing allowance deductions. A Common Myth There’s no percentage of your ministry income that limits how much your board can designate as housing allowance. The IRS guidelines and rules regarding your housing allowance with more helpful information and tips can... View Article

Designating Ministers’ Housing Allowance

How Much & When to Designate Using your Housing Allowance benefits wisely can be a valuable tool throughout your career. Seek personal advice for the best information about how to make the most of this wonderful advantage, both now and in conjunction with the properly set up clergy-specific 403(b) for tax-free housing allowance distributions. The... View Article

Multiple Residences and Housing Allowance

by Steve Merriman, EA The Appeals Court ruled on the Driscoll case (CA 11 2/8/2012) 109 AFTR 2d, regarding housing allowance deductions on multiple residencesstipulating that the clergy housing allowance can only be used for a primary residence and no more than one residence at a time. The Appeals Court reversed the Tax Court decision that allowed... View Article

Overlooked Charitable Contributions tax deductions

Listed below are some frequently overlooked tax deductions that might help reduce your tax bill.  Please remember that  whenever we talk about taxes, the following caveats apply:  “It depends,” and “these deductions may not apply to all taxpayers.” If you have any questions about these or any other tax-related matters give us a call. I.... View Article

The Clergy Tax Puzzle

Ministers Taxes can be confusing. There’s just a lot of myth and hear-say on the subject. By breaking the puzzle into three main categories in a complete plan, you’re likely to see huge savings right away.   Learn how to maximize the critical, “Three Tax Biggies” and most of the puzzle is solved in our Tax-Free... View Article

Working After Retirement May Affect Your Benefits

  Ministers often work beyond the “normal” retirement age. Extending your work life can affect your taxes and retirement benefits. Earnings limit. If you’re working, you probably should forgo the early payment option. Benefits received before full retirement age will be reduced by $1 for every $2 earned over an annual limit (currently $14,160). However,... View Article

Clergy Housing Allowance Answers

If you’re puzzled about some aspect of  your housing allowance or clergy tax situation you are not alone.  Find all that you should know about one of your greatest tax advantages, Housing Allowance, in a free, concise video,  “Ministers Housing Allowance.” In the mean time, here are a few of the top questions we get about... View Article

The Three Biggest Tax Savings for Ministers

By Steve Merriman, E.A The three “biggies” that all ministers need to maximize for the greatest tax savings are: Housing Allowance Clergy Advantage  Retirement Plan or a denominational 403(b) Ministry Business Expenses Get these three right and you’re pretty much there. The first area is housing allowance: Congress clearly intends ministers to exclude all expenses... View Article

Ministry Business Expenses

Importance of Entertainment Expenses

What are Ministry Business Expenses? Internal Revenue Code Section 162(a) states, “There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” An expense is ordinary and necessary if it is “customary or usual within a particular trade, business... View Article

Overlooked Charitable Contributions tax deductions

Listed below are some frequently overlooked tax deductions that might help reduce your tax bill.  Please remember that  whenever we talk about taxes, the following caveats apply:  “It depends,” and “these deductions may not apply to all taxpayers.” If you have any questions about these or any other tax-related matters give us a call. I.... View Article

The Incredible Value of an Accountable Plan for Ministers

Ministers have vulnerability for greater audit potential in two significant areas: 1. The first is Charitable contributions: because they’re typically disproportionately large in this group of people.  (Valid contributions are easily defended if you keep good records, and most of you do). However, here’s a real concern; 2. Ministry expenses are frequently not properly or completely... View Article

Mixing Business with Pleasure can be good for you and your pocket book.

Tax breaks are available for travelers who mix a bit of pleasure with their business travel Businesspeople or ministers who must travel for work reasons should keep in mind that they may be able to qualify for a travel bargain by piggybacking a vacation onto an out-of-town business trip. In effect, the business traveler gets... View Article

The Clergy Tax Puzzle

Ministers Taxes can be confusing. There’s just a lot of myth and hear-say on the subject. By breaking the puzzle into three main categories in a complete plan, you’re likely to see huge savings right away.   Learn how to maximize the critical, “Three Tax Biggies” and most of the puzzle is solved in our Tax-Free... View Article

Why Use an Accountable Plan for Ministry Business Expenses

By Steve Merriman, E.A. Why use Accountable Reimbursement plan for ministry business expenses? The theory with an Accountable plan is to get reimbursed on all ministerial expenses on a tax-free fringe benefit basis. There are six huge advantages to this; perhaps the biggest is that it properly identifies a minister’s expenses as church business and NOT personal... View Article

The Three Biggest Tax Savings for Ministers

By Steve Merriman, E.A The three “biggies” that all ministers need to maximize for the greatest tax savings are: Housing Allowance Clergy Advantage  Retirement Plan or a denominational 403(b) Ministry Business Expenses Get these three right and you’re pretty much there. The first area is housing allowance: Congress clearly intends ministers to exclude all expenses... View Article

Retirement for Ministers

Supplementing your 403(b) with a ROTH IRA

Ministers’ primary retirement plan should be a denominational plan or a clergy-specific 403(b)(9) like the Clergy Advantage 403(b). To supplement your retirement account after you’ve maxed out your 403(b) you may want to consider using a Roth IRA.  This is often the first choice most secular financial advisers recommend because they are not familiar with... View Article

Risk or Volatility?

  How should we view “Risk” in investing? Before you answer, let’s define Risk, being careful not to confuse it with Volatility.  The truth is, ups and downs of the market are volatility. They are normal and to be expected.  This roller coaster effect feels like risk and looks like risk.  But in reality, it is typical, normal volatility and nothing... View Article

403(b) Contribution Limits Have Increased

The limit for salary deferred contributions to your 403(b) is currently at $18,000 for those under age 50 and is at $24,000 for those over 50. The total limit including employer contributions can be up to $60,000 in some cases.  That number is set to increase yet, again in 2018 to $18,500 for contribution limits. ... View Article

New Tax Provisions for Roth IRA Conversions

  Who should look at a Roth IRA Conversion? Perhaps you should take a look at the benefits of converting some or all of a regular IRA into a Roth, particularly if you’re a married minister or in a high or low tax bracket.  Many ministers in the 0% tax bracket don’t realize they are because of... View Article

Working After Retirement May Affect Your Benefits

  Ministers often work beyond the “normal” retirement age. Extending your work life can affect your taxes and retirement benefits. Earnings limit. If you’re working, you probably should forgo the early payment option. Benefits received before full retirement age will be reduced by $1 for every $2 earned over an annual limit (currently $14,160). However,... View Article

The Three Biggest Tax Savings for Ministers

By Steve Merriman, E.A The three “biggies” that all ministers need to maximize for the greatest tax savings are: Housing Allowance Clergy Advantage  Retirement Plan or a denominational 403(b) Ministry Business Expenses Get these three right and you’re pretty much there. The first area is housing allowance: Congress clearly intends ministers to exclude all expenses... View Article

Social Security & Ministers

How to Calculate Gross Income with Clergy Housing Allowance

Why do minsters have a gross income that is different for Affordable Care Act (ACA or Obamacare) and Medicaid? We get a lot of questions about how to calculate gross income for ministers. This is a common area of confusion for pastors who are applying for medical insurance on the Marketplace. Once they find their... View Article

Social Security Tax for Ministers

Social Security can be many ministers biggest tax liability. Two things will help significantly to reduce social security tax for all ministers who have not opted out: Properly using your Accountable Plan and using the correct kind of  403(b) retirement plan with strategies to help reduce the amount of Social Security tax you pay or... View Article

How to Set Social Security Allowance for Ministers

Ministers or church leaders often wonder how to figure the amount of the Social Security Allowance.  The IRS does not require churches to pay a Social Security Allowance to its minister staff and provides no guidance on how to structure it. We suggest that the amount be set at whatever the church would be paying... View Article

Do ministers need to make quarterly tax payments?

Ministers, self- employed or retired individuals may need to make estimated tax payments of at least 90% of their current tax liability or 100% of last years tax liability. If your underpayment is over $1000 you can be penalized. Start making quarterly estimated tax payments as you earn income-you can't wait until end of the year. More details are available at www.clergysupport.com.

Tax Withholding for Clergy

Ministers working for churches are treated differently than other employees when it comes to tax withholding.  One major difference between clergy and regular employees is Social Security and Medicare taxes. Ministers are responsible for paying all Social Security Self-Employment tax on their salary and housing allowance, in addition to whatever State and Federal income taxes... View Article

Church Treasurer Resources

How to Calculate Gross Income with Clergy Housing Allowance

Why do minsters have a gross income that is different for Affordable Care Act (ACA or Obamacare) and Medicaid? We get a lot of questions about how to calculate gross income for ministers. This is a common area of confusion for pastors who are applying for medical insurance on the Marketplace. Once they find their... View Article

Do ministers need to make quarterly tax payments?

Ministers, self- employed or retired individuals may need to make estimated tax payments of at least 90% of their current tax liability or 100% of last years tax liability. If your underpayment is over $1000 you can be penalized. Start making quarterly estimated tax payments as you earn income-you can't wait until end of the year. More details are available at www.clergysupport.com.

Clergy Taxes – Contributions other than Cash or Checks

Many non profits and churches struggle  with how to properly handle contributions of a non- cash nature. It certainly can be a confusing subject.   Here’s the way it stands right now. How do we (the church or non-profit) handle non-cash contributions? When a church receives non-cash contributions, such as food supplies, vehicles, stock, etc. the church may provide... View Article

Tax Withholding for Clergy

Ministers working for churches are treated differently than other employees when it comes to tax withholding.  One major difference between clergy and regular employees is Social Security and Medicare taxes. Ministers are responsible for paying all Social Security Self-Employment tax on their salary and housing allowance, in addition to whatever State and Federal income taxes... View Article

Clergy Advantage 403(b) Retirement Plan

Supplementing your 403(b) with a ROTH IRA

Ministers’ primary retirement plan should be a denominational plan or a clergy-specific 403(b)(9) like the Clergy Advantage 403(b). To supplement your retirement account after you’ve maxed out your 403(b) you may want to consider using a Roth IRA.  This is often the first choice most secular financial advisers recommend because they are not familiar with... View Article

Highlights of the Clergy Advantage 403(b) Plan

The Clergy Advantage® 403(b) plan is exactly like a denominational plan but is designed for non-denominational ministers. Unlike secular plans or other types of 403(b)’s this clergy-specific retirement plan allows portability, tax savings on contributions and disbursements, including Social Security tax savings.  Additionally, participants enjoy as little or as much education and coaching as they... View Article

Missionaries Special Situation

Missionaries Special Tax & Social Security Issues

Most foreign missionaries do a good job calculating the foreign earned income exclusion and the housing allowance exclusion on their tax returns to some degree. However, a big problem still remains: Social Security tax is often neglected including the deductions – and this can be a huge tax liability. For example, let’s say that a... View Article

 

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