Week #13 Minister’s Taxes

Tuesday 04-14-09
By Nick Smith

1. Ministers who own their home do not pay federal income taxes on the portion of their church compensation that is designated in advance by their church as a housing allowance to the extent that the allowance is used to pay for housing related expenses and does not exceed the annual rental value of the home.
2. Do not hide your honorariums from the IRS. It is an easy thing to do as long as you are ok with lying.
3. Use turbo tax! It knows the ins and outs of pastoral taxation. You will find this very helpful.
4. Though you don’t have to pay income taxes on your house, you do have to pay social security on your house.
5. A minister who is buying a house is also able to use the interest as a regular deduction.
6. Remember that if you are going to live in a parsonage, you will not be able to gain equity, which could possibly very important if you move to a church who does not offer a parsonage.