As a pastor, one of your greatest earthly rewards is the clergy housing allowance. Though it’s nothing compared to the rewards you’re piling up in heaven, it is definitely something that should not be overlooked.
Here are some things to remember as you prepare your 2018 clergy housing allowance request:
It’s Your Responsibility
If you want the tax savings that the clergy housing allowance provides, it’s on you. It’s not the church’s responsibility, it’s yours. You are the one who has to calculate your anticipated expenses for 2018, submit them to your church, and make sure they approve it in time.
Also, it’s your job to track your expenses throughout the year to substantiate the housing allowance that you claim. Hang onto your receipts. If you get audited by the IRS, you are the one that will have to answer to them, not your church.
You Only Have 20 Days Left
You have 20 days left to get your 2018 housing allowance approved if you want it to cover 2018 in its entirety. That’s the end of the year, December 31. If you don’t get it done by then, you’ll be missing out.
Yes, you can request your housing allowance in March. But, then only your expenses after it is officially designated in March will avoid taxation. You will have to pay federal income taxes on your January and February mortgage payments just like everyone else. To take full advantage of the clergy housing allowance, you need to have it approved before the beginning of the year.
Don’t Forget Your Decor
When you calculate your housing allowance, you probably think of your mortgage or rent payment and utilities. That’s a good place to start, but you don’t need to stop there.
That teal wingback accent chair you’ve got your eye on? Count it in. Whether or not your husband thinks it’s functional, it can be included in your housing allowance. That riding lawn mower you’ve been dreaming of for years? Yep, that counts as well. Hiring a landscaping service so you don’t have to deal with the leaves from your 100-year-old oak tree anymore? Even though you may see it as a luxury, it can be included in your housing allowance.
There are several things that you specifically cannot include in your housing allowance. Those are expenses for groceries, paper products, personal toiletries, personal clothing, and maid service. However, you can include rugs, pictures, sheets, towels, cleaning supplies, dishes, light bulbs, etc. Pretty much anything used to maintain the home that isn’t specifically listed above can be included in your designated housing allowance.
So, what are you waiting for? Don’t waste any more time, go get your 2018 designated housing allowance approved! And remember, it’s always better to overestimate your housing expenses than underestimate them.
For more information on the clergy housing allowance, here are 11 FAQs and their answers.