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 accounted for. This can cause incredible hassles, not to mention, huge financial losses for the minister. Those expenses include car mileage, travel, meals and entertainment and a number of other things that are often overlooked and are too lengthy to list here. (A more complete discussion about what and how to account for it is contained in our Ministers’ Business Expenses video). Wrongfully accounting for ministry expenses can cost a lot and be one of the biggest areas of contention on your tax return. The simplest and most effective way to remedy this is with an Accountable Plan through the church or ministry employer.
If done right, an Accountable Plan will almost always increase a minister’s pay while it removes a huge area of audit potential, at no additional cost to the church! It’s also a potential way of reducing Social Security tax for many ministers. And that can be a double benefit, since we know that a minister’s greatest tax san be Social Security.