Each June the United Methodists celebrate pastors that are retiring. I always love hearing the words of wisdom they share with us at Annual Conference.
My gift back to these retirees is a reminder of how the Housing Exclusion works in retirement. Retirees can save thousands in taxes if they understand this. Actives should know about this as well for their own tax planning.
When a parsonage is not provided, most churches provide a cash housing allowance in lieu of the parsonage. Did you know that you can still designate a Housing Exclusion?
In this post, I go over the difference between the Exclusion and the Allowance and how they can work together.
This probably isn’t the most timely of posts, but it fits with the theme for the month in looking into housing and taxes for clergy.
For nearly twenty years, I didn’t have a good answer for how to estimate the value of the parsonage for tax purposes. I finally have a good answer.
If there’s any question I get more often than any other (at least relating to the Housing Exclusion), it’s this: “Does the IRS have a list of housing expenses I can write off?”
The answer is No. In all my reading, the IRS doesn’t even give an example. So, that has led some clergy tax experts to put together their own list which I share with you here.
When setting a Housing Exclusion, there are three things to pay attention to if you want to avoid overpaying taxes: 1)the amount, 2)the timing, and 3) the approval.
This is especially important for any pastors making midyear changes.
The seventh and final post in the series on church foundation focuses mainly on how to amend the foundation’s bylaws. Hopefully throughout this series, you’ve picked up some good ideas on how to improve how your foundation is organized. I have never seen bylaws or articles of incorporation without a way to amend them.
When it comes to a church foundation, good financial controls and records are must. As I continue walking through the template governing documents for a church foundation, I look into financial and legal issues to think through.
JCT Accounting Co 