All Posts By Amy

Welcome To The Sandwich Generation: Caring For Aging Parents


Two weeks ago I introduced you to your new generation. No longer are we Millennials, Gen Xers or Baby Boomers. We are now united in our responsibilities towards both our parents and kids at the same time. We are the Sandwich Generation. And being a part of this generation can be pretty rough.


It can be financially, emotionally, and physically draining to have your kids and parents both depending on you. Luckily, there are some things that you can do to ease the burden. Last week, we saw how understanding your options, setting clear expectations and boundaries, and making a plan can look when it comes to college-bound kids. Now let’s see how those same principles apply to your parents:


Welcome To The Sandwich Generation: Launching Your Children Into Adulthood


Last week, we discussed what it means to be a member of the Sandwich Generation, those adults who are responsible for bringing up their own children and for the care of their aging parents. We discussed how hard it can be to navigate caring for two very different generations without risking your relationships, finances, or sanity.


Today, we are going to talk about the younger generation, the bottom bread in the sandwich. While strollers and soccer clubs can be pretty spendy, for most parents their greatest financial burden comes when it’s time for their kids to go to college. This is where many parents really mess up their finances and put their own futures at risk.


How The Tax Reform Bill (Tax Cuts And Jobs Act) Affects Pastors


The GOP released their highly anticipated tax reform bill, the Tax Cuts and Jobs Act, today. Many pastors have been biting their nails in anticipation of how the “simplification of the tax code” might affect the clergy housing allowance or the Form 4361 Social Security exemption.


How Tax Reform Will Affect Pastors Specifically

The 429-page document says nothing about either the clergy housing allowance or the Form 4361 Social Security exemption. That means that if it were to pass in its current form, neither of these pastoral perks would be affected. The bill will probably be changed a lot before it is able to pass both the House and Senate, but pastors can breath a sigh of relief that they are not a part of the discussion.


The only part of the Act that does affect pastors specifically is the repeal of the Johnson Amendment. This was the law prohibiting churches from getting involved in politics for fear of losing their tax-exempt status. The Tax Cuts and Jobs Act states that churches:


shall not fail to be treated as organized and operated exclusively for a religious purpose, nor shall it be deemed to have participated in, or intervened in any political campaign on behalf of (or in opposition to) any candidate for public office, solely because of the content of any homily, sermon, teaching, dialectic, or other presentation made during religious services or gatherings, but only if the preparation and presentation of such content—‘‘(A) is in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose, and ‘‘(B) results in the organization incurring not more than de minimis incremental expenses.’’


There is a section of the Act that addresses employer-provided housing. This does not refer to parsonages and the ministerial housing allowance. It is a different section of the Internal Revenue Code that refers to things like onsite apartment managers or campground hosts, not pastors.


General Changes That Will Affect Everyone

Here are some changes that the Act proposes that will probably affect you, though they are not specific to pastors:


  • Tax bracket changes: For married couples, your first $24,000 will not be taxed. Everything from $24,000 to $90,000 will be taxed at 12% and everything from $90,000 to $260,000 will be taxed at 25%. For individual filers, the dollar amounts are all halved, except that the 25% tax bracket extends up to $200,000 of income.


  • The new standard deductions will be $12,000 for singles and $24,000 for married couples. There will no longer be personal exemptions.


  • The Child Tax Credit increases to $1,600 and the threshold for claiming it increases.


  • There is a new $300 tax credit for non-child dependents.


  • The mortgage interest deduction will be capped at $500,000 in loan debt for newly purchased homes.


  • You can deduct up to $10,000 of local property taxes but other state and local taxes will not be deductible.


For a previous analysis of how the changes in deductions might affect a family, please see this post.


Are You Eligible To Make Extra 403(b) Contributions?


People over 50 are eligible to make extra contributions to their 403(b) plans. However, some plans even let younger people make extra contributions. Here is everything you need to know regarding eligibility, limits, etc. for making extra contributions to your 403(b).


4 Simple Ways To Make Budgeting Easy And Effective


A lot of people treat budgets like New Year’s resolutions. They are lofty and unrealistic goals with only an 8% chance of becoming reality. But that’s not how it’s supposed to be.


Budgets are supposed to be personalized money management tools that help you take control of your finances. If you don’t have a greater sense of control and empowerment, then your budget isn’t working.


If you don’t have the kind of budget I’m talking about, then you really need one. Follow this link to learn how to make a budget that serves as a GPS and not a jail cell. Once you’ve got your GPS budget going, here are a few simple ways to make budgeting easy and effective:


Can You Still Receive Social Security Benefits Even After Opting Out?





There you have it, shortest blog post ever.


But in all seriousness, this is an important matter that can make a huge difference during your retirement. If you didn’t take saving for retirement seriously during your early years, even just receiving a little help from the Social Security Administration could double your monthly income in retirement.


If it really is possible to still receive Social Security benefits after opting out, how does that work? Well, there are two ways:


How Does Trump’s Proposed Tax Reform Affect The Clergy Housing Allowance And 4361 Exemption?



November 2, 2017 Update: Follow this link for a new post explaining how pastors will be affected by the Tax Cuts And Jobs Act proposed by the House GOP.


Yesterday, the GOP officially unveiled their “Unified Framework For Fixing Our Broken Tax Code.” Many people are eager to know how they will personally be affected by tax reform, especially pastors who receive certain benefits not available to others. Right now you’re probably wondering what, if any, changes will be made to the clergy housing allowance and your ability to opt out of Social Security.


Unfortunately, the framework does not answer any of your questions. It is a broad guide for congressional committee members to follow as they write out the details of tax reform. It will probably be months before we know anything specific. The Pastor’s Wallet will make sure to inform you as soon as anything official regarding how the tax reform will affect your 4361 exemption and the clergy housing allowance is made public.