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How To Make Quarterly Estimated Tax Payments For Ministers

by Monday, June 15, 2026
Picture of IRS Tax Form 1040-ES with blog post title: How To Make Quarterly Estimated Tax Payments For Ministers


As we’ve discussed previously, churches are not required to withhold taxes for pastors and other clergy. Because of a minister’s dual taxation status, the IRS expects them to pay as if they were self-employed. 

How do self-employed people pay taxes?

Through quarterly estimated tax payments. So, as a pastor, you’re required to make quarterly estimated tax payments.

What Are Quarterly Estimated Tax Payments?

Our American tax system is a pay-as-you-go system. Many people don’t realize this because they think they only pay once a year- on April 15. However, most employees are paying all year long, out of every paycheck. The yearly tax return they file is just to check their balance for over- or under-payments. 

The IRS doesn’t want to wait a year to get their money. They want it immediately, which is why most employees are subject to mandatory tax withholding. Self-employed people, though, don’t have an employer to withhold their taxes for them. And many of them do not pay themselves a regular paycheck from which taxes could be withheld. Therefore, the IRS set up the quarterly estimated tax payment system.

Self-employed people (or those treated as if self-employed, like clergy) are required to pay taxes four times a year with IRS Form 1040-ES. These payments include federal income tax and SECA taxes, which are the Social Security and Medicare taxes.

When Are Quarterly Estimated Tax Payments Due?

While quarterly payments are due four times a year, the year is not divided up equally. This is when each payment is due and what each payment covers:



If the due date falls on a weekend or holiday, it gets pushed back to the next business day. For example, in 2028, January 15 is a Saturday, so the payment is due the next business day, Monday, January 17, 2028.

How Should Pastors Calculate Quarterly Estimated Tax Payments?

IRS Form 1040-ES includes a worksheet for calculating estimated payments. However, it gets complicated. Use that if you want something comprehensive and exact. Otherwise, I will explain the basics of calculating your estimated payments.

Calculating Estimated Income Tax Payments

I’ll start by addressing income taxes, because that applies to all pastors, whether or not you’ve opted out of Social Security. If you’ve opted out, this is all you have to worry about. If not, you need to read the next section as well.

The basic way to figure estimated taxes is to take your expected salary (not counting housing allowance) and subtract expected deductions (standard or itemized, plus half of SECA taxes due) to find your expected taxable income.

Expected Salary (excluding housing allowance) – Expected Deductions = Expected Taxable Income

Then look up the tax on that expected taxable income in the 2026 tax rate schedules below (taken from IRS Form 1040-ES). 



That is your expected annual tax. You can lower it by any tax credits you expect to receive, such as the child tax credit. Once you’ve accounted for credits, you can just divide it so that it represents the quarter you are paying. September’s estimated payment covers 3 months (June, July, and August), so the equation would look like this:

Estimated Annual Tax (Less Expected Tax Credits) * 3/12 = Quarterly Tax Payment Due on September 15

If you have irregular income, you should look back at just the months in question. Take your income from those months, subtract the time period’s portion of your expected annual deduction (for example, 3/12 of the standard deduction), and use that amount to figure your tax for the quarter. 

Remember that your housing allowance is exempt from federal income taxation, so it should not be included in these calculations!

Pastors Participating In Social Security

If you chose to remain in the Social Security system, then you have to pay SECA taxes on top of your income taxes. Remember that your housing allowance is not exempt from SECA taxes, so you will need to include it in your total income. If you live in a parsonage, you also have to include the fair market rental value of the parsonage in your total income.

Your SECA taxes are 15.3% of 92.35% of your income (capped at $184,500 in 2026). For this September’s payment, you would calculate it as:

Income (including housing or parsonage allowance) * 0.9235 * 0.153 = Annual SECA Taxes

Annual SECA Taxes * 3/12 = SECA Taxes Due This Quarter

If your total income exceeds $184,500, then your SECA taxes are 15.3% of 92.35% of income up to that amount plus 2.9% above that amount. 

Your quarterly estimated tax payment is comprised of both your estimated income taxes due and SECA taxes.

How To Avoid Penalties

If you don’t pay your estimated taxes, you will be penalized by the IRS. You can also incur penalties if you underpay. Sometimes it can be hard to estimate taxes, so the IRS created “safe harbor” calculations. If you use these calculations you will not be penalized, even if you underpay. You should be safe from penalties if you:

  • Expect to owe less than $1,000

  • Pay 100% of your previous year’s tax liability if your adjusted gross income is under $150,000. If it is over that, you have to pay 110% of the previous year’s tax liability.

  • Pay within 90% of your actual tax liability for the year

Another Way To Do It

Making quarterly estimated tax payments can be a real pain. If you don’t want to have to deal with this, ask your church to withhold taxes for you. While they aren’t required to, they are allowed to. They can’t pay your SECA taxes for you, but they can withhold enough to cover your SECA taxes at the end of the year. This article explains how it works.


Another way to avoid paying quarterly estimated taxes is by having another employer withhold more. If you or your spouse is an employee of a secular company that withholds taxes, just have them withhold enough to cover your pastoral income. Changing your withholdings is as simple as filling out a Form W-4 and filing it with the company’s Human Resource department. 


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The New TrumpIRA Is Coming. Here’s Why Your Church 403(b) Is Still the Better Path.

by Monday, May 11, 2026
The New TrumpIRA Is Coming. Here's Why Your Church 403(b) Is Still the Better Path.

Paul McWilliams is a pastor’s kid turned financial advisor specializing in helping pastors and churches make wise financial decisions that align with their mission.

On April 30, 2026, President Trump signed an Executive Order creating TrumpIRA.gov, a new federal platform set to launch January 1, 2027. The headline is genuinely good news for a lot of American workers: a streamlined way to compare low-cost IRAs, plus up to $1,000 per year in federal Saver’s Match contributions for eligible lower- and middle-income earners.

If you’re a pastor without a retirement plan at your church, this matters. But if your church already offers a 403(b), or you’re considering whether to push for one, don’t let the new shiny option distract you. For ministers, the church 403(b) is still the most powerful retirement vehicle available, and it isn’t even close.

Here’s why.

The Housing Allowance Continues in Retirement

This is the single biggest reason a church 403(b) beats every other retirement account on the planet for ministers. Distributions from a church-sponsored 403(b) can be designated as a housing allowance in retirement, which means a portion of what you withdraw can be tax-free for federal income tax purposes (subject to the lesser-of rules in IRS Publication 517).

A TrumpIRA cannot do this. A traditional IRA cannot do this. A Roth IRA cannot do this. A SIMPLE IRA cannot do this. A SEP IRA cannot do this.

Roll your church 403(b) into an IRA at retirement, and you permanently forfeit this benefit. For many pastors, that one decision can cost them thousands of dollars in lifetime taxes.

SECA Savings While You’re Still Working

Pastors pay self-employment tax (SECA). Contributions to a church 403(b) made through salary reduction reduce your SECA wages, which means you’re not just deferring income tax, you’re saving SECA on every dollar you contribute.

A TrumpIRA contribution is made with money you’ve already paid SECA on.

Higher Contribution Limits

IRA contribution limits are capped well below what a 403(b) allows. In 2026, you can contribute up to $24,500 in salary deferrals to a 403(b), with additional catch-up contributions if you’re 50 or older. The maximum contribution allowed to an IRA is $7,500 ($8,600 with catch-up for those over 50). For a pastor trying to make up for years without a retirement plan, that gap is enormous.

In addition to the salary you can contribute, the church can also make contributions to the 403(b), either through a match or non-elective contribution. This is not an option with the TrumpIRA.

“But My Church Is Too Small for a 403(b)”

This is the most common objection I hear, and it’s based on outdated information. Every minister can have access to a church 403(b), regardless of church size, budget, or staff count. A bivocational pastor at a 30-person church plant can have the same access as a senior pastor at a multi-site campus. The right advisor can establish a church 403(b) for any qualifying minister, often with minimal cost or administrative burden to the church.

The Bottom Line

TrumpIRA.gov is a good development for the broader American workforce. But it isn’t designed for ministers, and it cannot replicate what Congress has specifically built into the tax code for pastors through the church 403(b).

For ministers, the housing allowance continuation alone is usually worth more than the Saver’s Match many times over. Add SECA savings and the higher contribution limits, and there is almost no scenario where a pastor with access to a 403(b) is better off in a TrumpIRA. And every pastor can have access.

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What Does It Mean for Men to “Provide?”

by Monday, April 20, 2026
Picture of a family walking along a beach with blog post title: What Does It Mean for Men to “Provide?"

A Pastoral Reflection on 1 Timothy 5:3–16

This is a guest post by Matt Winquist. Matt is a pastor, husband, and father who has experienced family life from both the pulpit and the living room floor. He and his wife, Kelly, raised their two daughters through many seasons, including twelve years when Matt served as the primary caregiver at home. He enjoys helping pastors and families think biblically about faith, work, and everyday obedience. Learn more at rolereversedparents.com.

If you read Pastor’s Wallet regularly, you’re used to thoughtful, practical guidance on budgets, housing allowance, benefits, and the financial realities of ministry. Today, I want to take a slightly different angle. This reflection still concerns money, but more specifically, a passage of Scripture that often weighs heavily on pastors’ consciences when finances at home do not look the way they expected.

Pastoral ministry is demanding in ways many of you understand firsthand. Long hours, emotional weight, spiritual responsibility, and modest pay remain realities most pastors accept early on. Many of us also accept our families may need to make financial adjustments in order for us to serve faithfully.

In recent years, one adjustment has become increasingly common: pastors’ wives working outside the home, sometimes earning more than their husbands. A 2017 Lifeway study found more than half of pastors’ wives work outside the home, and many contribute most of their household income. For some pastors, this reality creates quiet discomfort. For others, it produces guilt. For a few, it raises a deeper question: Am I failing to obey Scripture if I’m not the primary earner?

That question almost always circles back to one verse: 1 Timothy 5:8, where Paul warns anyone who does not provide for his relatives “has denied the faith and is worse than an unbeliever.” It is a serious verse and one that deserves careful reading.

What Problem Is Paul Actually Addressing?

First Timothy 5 is not a discussion about employment patterns or marital roles. It addresses widows and responsibility within the church. Paul corrects a specific problem: believers neglected vulnerable family members and shifted responsibility onto the church.

Throughout the chapter, Paul defines who qualifies as a “widow indeed,” distinguishes between those who need ongoing support and those who can care for themselves, and clarifies when the church should step in. His concern is not who earns the paycheck. His concern is ensuring no one is abandoned.

When Paul speaks sharply in verse 8 about “providing,” he confronts those failing to care for members of their own household, especially widows who depended on family support. Such neglect, Paul says, is worse than unbelief because even the surrounding unsaved world understood families bear responsibility for their own.

A Shared Responsibility, Not a Gendered One

What often goes unnoticed is Paul applies this responsibility to both men and women. Just a few verses later, in 1 Timothy 5:16, believing women receive instruction to care for widows in their families so the church is not burdened.

The language shifts slightly. Men receive instruction to “provide.” Women receive instruction to “care” or “assist.” The responsibility, however, does not change. Paul does not assign different kinds of provision based on gender. He describes one obligation using overlapping terms. To provide is to ensure care. To care is to assist. Both point to the same goal: ensuring no one in the family lacks help.

Here, many assumptions begin to unravel. Scripture does not limit provision to income alone. Financial support may be part of it, but provision also includes presence, management, advocacy, protection, and daily labor on behalf of others.

What This Means for Pastors Today

Before I ever stayed home with my children, I already held conviction Scripture allowed freedom in how families live out the call to provide. I did not want to step into a role that violated God’s Word. As I understood passages like 1 Timothy 5, Scripture pointed clearly toward responsibility rather than a single economic model.

For some pastoral families, faithfulness looks like the husband earning more. For others, faithfulness looks like the wife doing so. In many churches today, gifted and capable wives help stabilize family finances so their husbands can remain in ministry. This reality reflects shared obedience, not failure.

In our own family, provision has taken different forms across different seasons. At one time, it looked like me serving as a stay-at-home dad, acting as caregiver, household steward, and consistent presence while my wife pursued the work outside the home God placed before her. At other times, we both worked outside the home and shared care for our daughters and household equally. We also experienced seasons when my wife served as a traditional stay-at-home mom and I was the only one working outside the home. In every season, guided by the Lord, our aim remained the same: ensuring no one in our family lacked care.

Paul’s concern in 1 Timothy 5 is not whether a pastor earns less than his wife. His concern focuses on whether anyone under his family care experiences neglect.

Freedom Where Scripture Gives Freedom

Over time, I have become less concerned with defending particular family arrangements and more concerned with helping fellow pastors and believers read Scripture carefully. When we import expectations into the text, like some do in 1 Timothy 5, we risk binding consciences where God has given freedom. Unity in the church does not require identical family structures. It requires humility, careful interpretation of Scripture, and willingness to allow freedom where God has not issued commands.

For pastors who quietly wonder whether their paycheck disqualifies their faithfulness, 1 Timothy 5 offers relief rather than condemnation. The passage does not demand earning more than one’s wife. It calls husbands and wives to ensure genuine care for those entrusted to them.

That, in the truest sense, is what it means to provide.

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What To Do If Your Clergy Housing Allowance Exceeds Your Actual Expenses

by Monday, March 2, 2026
Picture of blue couch against a white wall with blog post title: What To Do If Your 2018 Clergy Housing Allowance Exceeded Your Actual Expenses

You were going to replace your fence, but then you didn’t. You were going to buy that new sofa, but then you didn’t. You were going to move to a more expensive place, but then you didn’t. Life doesn’t always go as planned, does it?

While altering your plans can be annoying, it is more significant for pastors when it comes to housing expenses. At the beginning of the year, you have to carefully estimate your yearly housing expenses in order to avoid paying taxes on them with the clergy housing allowance. You meticulously calculate your anticipated rent, utilities, home purchases, and big projects.

And then life happens. Plans change. Things don’t go as expected, and your eligible housing expenses are lower than the housing allowance that your church gave you. You should have been paying taxes on some of that money, and you didn’t.

Now, what do you do?

Excess Housing Allowance Is Taxable Income

What the housing allowance is is a provision that allows you to exclude your housing expenses from gross income for federal tax purposes. At the beginning of the year, you tell your church how much of your income you plan to use for housing and that amount is not reported to the IRS as income.

However, if you don’t use it all for housing by the end of the year, you need to let the IRS know and pay federal income taxes on the rest. Let’s see what that looks like in real life.

Say your church pays you $60,000 a year. You designate $25,000 of that as a housing allowance so your church only reports to the IRS that you had $35,000 of taxable income.

If you only spend $22,000 on housing for the year, you have an extra $3,000 that you should have paid taxes on but didn’t. You need to add that extra $3,000 of housing allowance back into your income and pay taxes on it. Not doing so is tax evasion and will get you into trouble if the IRS audits you.

How To Report Your Excess Housing Allowance

So, how do you report it as income in order to pay taxes?

Add it in with your other wages on line 1 of your Form 1040. Then, on the dotted line next to it, write, “Excess allowance” and the amount. Here is an example:

Picture of Form 1040 with "Excess Housing Allowance 3,000" written on line 1 for clergy.

Yes, it is as simple as that. Now it is added in with your wages for when your taxes are calculated.


If you’re using tax software, it should ask you for your designated allowance and actual expenses. A human tax preparer should do the same. If they don’t, then you might want to look into working with a tax preparer who specializes in helping clergy.

That’s how to include it for income taxes, but what about SECA, your Social Security and Medicare taxes? Well, you don’t have to worry about that at all. Because you always have to pay SECA taxes on your housing allowance, claiming too much won’t make any difference in what you have to pay. You are already paying the full amount on Schedule SE.

What You Can Do Differently For Next Year

Now, while ending the year with excess housing allowance may have made your heart skip a beat and worried you a bit, it wasn’t that bad, was it? With such an easy way to correct it, it’s often better to err on the side of claiming too large an allowance than too small.

Too many pastors don’t claim a large enough housing allowance and end up needlessly paying extra taxes. The best way to avoid that and limit your tax bill is by overestimating your yearly housing allowance.

There is one thing I need to note, though. There is a potential downside to overestimating your housing allowance.

Things To Watch Out For

Your housing allowance lowers your gross income for federal tax purposes and there are some important things that are limited by your gross income. The biggest one that most pastors need to watch out for is the refundable portion of the Child Tax Credit. Claiming too much of a housing allowance can actually limit the amount of money you can get. This article explains why. Contributions made to retirement accounts are also calculated and limited based on income. There is a chance that by overestimating your housing allowance you could negatively affect the amount of money that you can save for retirement.

Make sure to look into those two things before blindly following my suggestion that overestimating is better than underestimating. Remember, just because you read something on the internet doesn’t mean it’s necessarily best for your unique situation.

Now that you’ve fixed last year’s housing allowance, what about this year’s? Is it already approved by your church with an accurate estimate or overestimate?

If not, you’d better get on it! The housing allowance cannot be used retroactively, so every day you procrastinate is another day that you are paying taxes on your housing expenses unnecessarily. If you need to make a change, make one. The IRS does not limit the number of changes you make to your housing allowance or the timing of them, as long as they are done proactively.

Purchase The Complete Guide to the Clergy Housing Allowance by Amy Artiga
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Tax Preparation for Ministers: Reader Referrals

by Tuesday, February 24, 2026
Picture of tax forms with blog post title: Tax Preparation for Ministers: Reader Referrals

Clergy taxes are incredibly unique in a complex tax system, so it can be hard to find a tax preparer who actually understands how they work. I’m always getting requests for referrals, so I turned to my readers for help. These are the tax preparers that my readers have recommended. I have not personally worked with any of them and have done no research or due diligence, but they each have at least one happy pastor client.

The only way to get on this list is to be referred by a client. If you are a tax preparer who wants to be on this list, have one of your clients reach out to me. Also, if you reach out to someone on the list and find that they are no longer serving pastors, please let me know and I will update it. 

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How Do You Report Your Clergy Housing Allowance To The IRS?

by Monday, February 16, 2026
Picture of a woman on the telephone with blog post title: How Do You Report Your Housing Allowance To The IRS?
Purchase The Complete Guide to the Clergy Housing Allowance by Amy Artiga


This is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance: 

The church is not required to report the housing allowance to the IRS. Unless a church includes it in an informational section on Form W-2, the IRS and the Social Security Administration (SSA) are only made aware of the housing allowance when a minister files Schedule SE to pay Social Security taxes under SECA. 

Form W-2

You should review your Form W-2 that you receive every year to make sure your church prepared it correctly. Many church treasurers and bookkeepers have received absolutely zero training, they’re just doing it because they’re not good at saying no. So, make sure to double check. This is what it should look like:

Box 1 

Wages excluding housing allowance. This is what the church reports to the IRS as your income. The housing allowance is exempt from income and should therefore not be reported here. If it is, the IRS will think you owe more in taxes and you will have a mess on your hands. If your church accidentally includes your housing allowance in Box 1, have them correct the mistake right away by filing an amended Form W-2. 

Boxes 3, 4, 5, and 6

These boxes are for Social Security and Medicare and, regardless of the housing allowance, should be blank. That is because ministers are considered self-employed for Social Security purposes as we discussed already. It was in that exciting SECA/FICA excursus that you probably skipped. Don’t worry about it, it’s boring stuff, you can just take my word for it.

Again, your income is not reported for Social Security and Medicare purposes on Form W-2 and churches are not supposed to withhold payroll taxes for you. Rather, you have to calculate your own Social Security and Medicare tax payments on Schedule SE and file it with your tax return.

Box 14

Box 14 is for informational purposes only. As such, your church is allowed to use it to report the amount designated as a cash housing allowance. However, this is not required and some churches report it in other ways. If there is nothing in your Box 14, then you should expect other communication from your church regarding your housing allowance amount.

Box 16

Box 16 is for state wages and would be filled out as per your state’s laws.

Non-Employee Ministers

Ministers who are not employed by a specific church, such as traveling evangelists, will not receive a W-2. Rather, you may receive a Form 1099-NEC (Form 1099-MISC for tax years prior to 2020). Any church that has paid you over $600 in a year is required to issue you one. For them to be able to do so, you will need to submit Form W-9 to them prior to providing your services. Form W-9 simply contains the basic information they will need to be able to report your income to the IRS.

The $600 trigger does not include a housing allowance that was properly designated in advance, reimbursed expenses, or contributions to a 403(b). Thus, if you claim all of your income from a specific church as a housing allowance, they aren’t required to give you anything to show for it. It is up to you to track the income you receive from various churches and how much of it is eligible for the housing allowance.

Form 1099-R For Pension Distributions

Under certain circumstances, you may be able to claim a ministerial housing allowance even during retirement. The next chapter will discuss this in detail. 

If you take a housing allowance during retirement, you will receive a 1099-R instead of a W-2. Your housing allowance may or may not be listed on the 1099-R. The form may just say “Taxable Amount Not Determined,” meaning that you have to decide which portion is taxable and which isn’t. If it is listed as a taxable distribution, you can still take it tax-free by including the housing allowance amount on line 4 of Form 1040. (Prior to 2018 it was on line 16.)

Housing Allowance Amount

Your church treasurer is responsible for providing you the amount of your annual housing allowance in writing at the end of the year. If you haven’t gotten one, try bringing the treasurer homemade brownies. They can really work wonders. A copy of the notification should also be kept in the church’s files.

Notification can simply be a letter stating something along the lines of, “Your designated cash housing allowance for 2018 was $…” This letter goes to the pastor and not to the IRS. It is for informational purposes only. It is not attached to the pastor’s tax return that is sent to the IRS, either. You’ll have plenty of other papers to send them, so keep this one for yourself.

Also, as mentioned above, the housing allowance amount can be included in Box 14 on Form W-2. Box 14 is an informational box that employers use to report various kinds of information to employees, such as retirement contributions and housing allowance. Box 14 would simply say something like, “Housing: 18,000.” If it is included on Form W-2 then it has been reported to the IRS.

You will need this information to fill out Schedule SE and pay your SECA taxes.

Your church will report to you the amount paid as a cash housing allowance. However, if you live in a parsonage it is your responsibility to calculate the fair market rental value and include it on Schedule SE. Since you are the one receiving the tax benefit, it is your responsibility to do the calculations, not your church’s. Go back to the last chapter to learn about how to calculate the fair market rental value of a home.

Housing Expense Records

It is your responsibility as a pastor to track your housing expenses. Your church has no responsibility in this area beyond designating the housing allowance. If you claim an erroneous amount or don’t have the records to back up your claims, it is all on you and has nothing to do with the church.

In fact, it’s really none of their business how you use the housing allowance. That’s between you and the IRS. There is no need for you to submit your itemized expenses to the church or share them in any way. They are confidential. 

Some churches have curious board members, but you can let them know that there is nothing in the law that requires them to know how you are spending your housing allowance. Just be nice about it, because they’re the ones that have to designate a housing allowance for you in the first place! If it doesn’t go over very well, go ahead and take them some brownies, too. 

As you can see, it is important that you keep your own records. Make sure to keep receipts, mortgage statements, and any other evidence that supports your claim of a housing allowance. These will come in handy if you ever get questioned by the IRS. In an audit, the thicker the paper trail, the better. Digital “paper trails” also work well.

Purchase The Complete Guide to the Clergy Housing Allowance by Amy Artiga
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Top 10 Clergy Finance Blog Posts of 2025

by Monday, December 29, 2025
Gifts on a tan background with blog post title: Top 10 Clergy Finance Blog Posts of 2025

We’ve arrived at the final days of 2025. At the end of each year, I like to do a recap of the year’s most popular blogs. This is only for 2025. For all time views, the winner would be #8 below, third place would be #1 below, and second place would go to Secular Jobs For Pastors: 9 In-Demand Skills You Already Have. That’s just blog posts, though. This year’s top-viewed page, which is also the all-time top-viewed page, is our Pastor’s Wallet free online housing allowance calculator. Now, here are 2025’s most popular blog posts:

1. What Expenses Qualify For The Minister’s Housing Allowance?

This year’s top post is actually almost 6 years old. It’s an excerpt from my book about the housing allowance that I published right when I published the book back in 2020. I guess I was right in assuming this would be one of the most popular topics! It includes the list of what is eligible and isn’t eligible for the housing allowance, and an explanation of how to find out about things that aren’t on the list. 

2. Your Top 10 Clergy Housing Allowance Questions Answered

Another oldie-but-goodie, this post is almost 3 years old. However, the tax law hasn’t changed, so it’s just as relevant and accurate today as it was when I wrote it. It’s a great overview of the clergy housing allowance with a lot of links to other articles for more in-depth study.

3. How the One Big Beautiful Bill Act Affects Pastors

I’ll be honest, this is the only brand-new blog post I wrote for Pastor’s Wallet this year. Due to my health (long covid is not fun!), I haven’t been writing, just updating old posts and inviting guests to write. But when a big tax bill passes, helping you understand it jumps to the top of my priority list. I mean, if I am a professional and find researching tax bills boring, I would hate to make you do it!

4. How Do You Report Your Clergy Housing Allowance To The IRS?

This is another excerpt from my book about the housing allowance. It covers a topic that most churches and pastors find intimidating. No one wants to make a mistake and get the IRS after them, and this article will help avoid that.

5. The Great Tax Benefits of 403(b) Plans for Pastors

Church-sponsored 403(b) plans are a wonderful tool for pastors to save on taxes while saving for the future—especially those who have not opted out of Social Security. I wish every church would offer one, so I asked financial planner Nate Skelly to share with you all of the great benefits available through a 403(b) plan. 

6. Who Is Eligible For The Clergy Housing Allowance?

This article goes in depth with IRS definitions and quotes from the Treasury Department. It’s an important thing to understand, though I have to admit that there are still some gray areas where the answer is not clear. 

7. Claiming A Minister’s Housing Allowance In Retirement

Here is another excerpt from my book about the housing allowance and something I help my financial planning clients do on a regular basis. I wish everyone would read this because, unfortunately, I still hear from pastors who have made irrevocable mistakes that disqualify them from claiming a housing allowance in retirement. 

8. How Much Housing Allowance Can A Pastor Claim?

This is another popular question and our most popular blog post of all time. It’s an important one to read because there is a lot of incorrect information out there about it, even from professionals like CPAs. 

9. Should You Keep A Mortgage Just For The Housing Allowance & Mortgage Interest Deduction?

This is a post that I updated this year that answers an incredibly common question. Since there isn’t an easy, one-size-fits-all answer, I provide some examples with calculations and a list of factors to consider.

 

10. How Pastors Can Find Free Getaway Lodging for Sabbaticals or Vacations

This is a guest post from a pastor just like you who was doing his own personal research to see if he could get away without breaking the bank. He put so much time and effort into it that he wanted the rest of you to benefit from it as well and offered to share it with my Pastor’s Wallet readers. Thank you, Jon Neal!

Thank you for your ministry and support in 2025. I pray that 2026 is a year full of blessings for you and your family!

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How To Appeal A Social Security Benefits Decision

by Monday, October 20, 2025
Picture of boxing gloves with blog post title: How To Appeal A Social Security Benefits Decision

Because a pastor’s opportunity to opt out of Social Security is so unique, many Social Security employees don’t understand the law surrounding it. Unfortunately, this results in pastors being denied benefits that are rightfully theirs. This is what you can do to appeal the decision if it happens to you.

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Ministry or Money?

by Monday, September 1, 2025
Picture of a man at a crossroad with glob post title Ministry or Money: A guest post by Joe Floris

This is a guest post by Joe Floris. With over 20 years of experience in full-time church ministry, Joe currently serves as the teaching pastor at Community Alliance Church in Butler, PA. His passion for both personal and pastoral finances has grown alongside his calling to shepherd others in their financial journeys.  

 

If you are reading this, it is likely you are a pastor.  Which means you probably you have been through the candidating process at a church.  You meet people.  Eat food.  Answer questions.  Eat food.  Ask questions.  Eat food.  Give a sermon.  Eat… well, you get it.  Eventually, the tricky topic of pay comes up.  That was where I found myself newly married, in my late-20’s, at the end of the interview process for a local church staff position. The church offered me the job, but my number crunching showed it would take some gymnastics to make the salary meet our budget.  Timidly, I asked the Senior Pastor if there was any way to stretch a little further with the offer, and he graciously explained there just wasn’t.  My wife and I prayed about it and ultimately decided to accept the position.  It was so long ago I don’t remember the amount but I clearly remember calling the pastor to accept.  With noticeable relief, he said, “I’m grateful you chose ministry over money.”  

Ministry or Money?

Is it a choice?  Have you ever felt like there is a game of tug-of-war between these two words and you are the rope?  While some try to caricature all pastors based on a few “rich preacher types”, 99.9% of us aren’t like that.  You didn’t enter ministry so you could afford a closet full of $500 sneakers or a private jet.  But you also don’t want to ask your spouse to live in a van down by the river.  My guess is if you are reading a blog like The Pastor’s Wallet, you have spent some time contending with this tension.  I know I have, and I would like to offer 5 insights I have discovered along the way.  

Don’t Bear the Burden Alone

By the time a pastor shows up day one at their first ministry position, they have already done a lot of choosing ministry over money.   Most churches expect their pastor to at least have a four-year ministry degree and often an MDiv as well.  The most recent studies claim MDiv students are graduating with an average of $55,000 in student debt.   While most ministry schools strive to make education affordable, they are prioritizing money enough to remain in the black financially even if it leaves their graduates significantly in the red.  The same is true for a church.  If a church believes it can’t afford a more robust pastoral package, that may be true—but it’s still a way of saying there is a point where we value our money over your ministry.  If it can be necessary for an organization to decide “This is the most we can spend on your ministry”, why should it be offensive for a pastor to decide, “This is the least amount for which I can offer my ministry”?  Pastors shouldn’t be expected to always choose ministry over money so others can choose money over ministry.  The burden of balancing living by faith and living by facts when it comes to money is for both churches and pastors to bear.     

Beware of Greed

Pastors are the most generous people I know!  They aren’t greedy, at least not the way we normally think about greed.  Which is why we all need a warning from time to time.   “Beware of greed” is a quote from Jesus in Luke 12.  The full quote is, “Beware, and be on your guard against every form of greed” (Luke 12:15 NIV).  It comes right before Jesus tells a story about a rich farmer who gets a bumper crop, plans to build bigger barns, and dies.  Very uplifting.  The interesting thing is the rich farmer doesn’t fit the typical description of greedy.  He works hard and develops a long-term savings plan.  He isn’t out buying fancy sandals and designer goats.  Hence Jesus’ warning about every form of greed.  Greed is more than wrongly desiring money.  It is also wrongly desiring feelings money can provide.  What money connected feeling might a pastor desire?  Feeling better than others.  Think about it.  Money is highly valued in the earthly kingdom and those who are rich have a tendency to think they are better than others.  James warns about this.  But, in Jesus’ kingdom, sacrifice has an extremely high value.   What better way to have a huge sacrifice income than to choose a vocation with a limited money income – like ministry?  Pastors, who are rich in sacrifice, must beware of allowing their richness to trick them into believing they are inherently better than others who sacrifice less.  It is obvious greed to think, “I need to have more money so I can feel better about myself compared to others.”  It is sneaky greed to think, “I need to have less money so I can feel better about myself compared to others.”    Either way, though, it’s greed.  

Boring Provision

God always provides, but sometimes it’s unnoticed because it appears boring.  Remember Exodus 16 when God began providing miraculous manna for the Israelites?  Just when they thought they would starve, God’s just-in-time provision must have been incredible!  Many of us have stories of God’s miraculous, just-in-time provision.  A surprise inheritance or bags of groceries anonymously left at your door.  In these times, it can really feel like God provides!  But think about Exodus 16:35, “The sons of Israel at the manna forty years.”  Forty years of the same old manna had to be mind-numbing… and tongue-numbing.  No one woke up saying, “Can you believe it?  Manna!”, yet it was still God’s provision.  For us pastors, God also provides in some boring ways that can have a powerful impact on our finances.  One is through special rules for pastors offering incredible savings.  Don’t overlook powerful opportunities like housing allowances, HSA’s and 403b’s.  Ignoring them because they sound boring or complicated is rejecting God’s provision just as much as turning down an envelope of cash.  Another example of God’s boring provision is forcing you to develop dollar skills rather than giving you more dollar bills.  Fine – it’s cheesy, but go with me here.  Living on a limited income, as many pastors do, forces you to get better at handling money which often leads to having more money.  Living on a pastor’s income requires cultivating skills like budgeting, expense tracking, saving and more.  The long-term impact of these skills is far greater than just getting a bigger paycheck.  And, that is God’s boring but powerful provision.  

Before You Need It

I remember the first raise I got as a pastor.  Actually, I should say, I remember how I felt – guilty.  I was a single 23-year-old, living with a roommate and spending $200 a month on rent.  I drove an old paid-off Honda and wore thrift store clothes.  Is my glamorous life making you jealous?  My biggest bill was student loans, and I just saved the extra.  Even though I didn’t make a lot of money, I didn’t spend a lot of money.  In a conversation with my dad, I confessed, “I feel guilty taking the raise because I just don’t need it.”  His wise reply stuck with me, “No, you just don’t need it yet. You better take it, because one day you’re gonna need it.”  Over time, I’ve realized needing money and making money don’t always occur simultaneously.  In times when you earn more from your ministry than you immediately need, it could be God preparing you financially for the future He has for you.  God may give you what you make now to make up for what you won’t make later.   How you manage money today might determine how available you are to God tomorrow.  Maybe you are in a season of experiencing God’s financial abundance from your ministry.  Thank Him for what He has given you.  But, don’t forget to ask Him what He has given it to you for.  

More Than Money

Money is a tool for accomplishing goals, not a goal itself.  We need to make money from ministry to accomplish goals like buying things needed to live.  The days of bartering sermons for cartons of eggs are over (if they ever existed at all).  Yet, there are many ways ministry allows us to realize important goals in life without needing money for it.  It could be the goal of using your gifts and abilities for a deeper purpose.  Or sharing in the joys and sorrows of a relational community.  Maybe ministry offers you the more flexible daytime schedule you really want so you can be present with family.  Or preparing sermons is a way feed your hunger to learn.  Ministry means you’ll definitely cross paths with some “odd” people (trying to be nice here), but you will also meet the most sincere, humble, inspiring people humanity has to offer.   And you will certainly have wild and crazy stories to tell… one day… in a town far far away.  The point is there are lots of folks with lots of money who have none of these things.  Ministry should offer the money we need to live, but it is important to remember, it offers much more than that.    

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How Churches Can Help Pastors Catch Up on Retirement Savings

by Monday, August 4, 2025
Picture of runners with blog post title: How Churches Can Help Pastors Catch Up on Retirement Savings by Paul McWilliams

Paul McWilliams is a pastor’s kid turned financial advisor specializing in helping pastors and churches make wise financial decisions that align with their mission.



Many pastors spend the early years of ministry pouring everything into their calling—often at great personal sacrifice. They plant churches, lead with limited or no salary, and make do without retirement benefits because the church simply isn’t in a position to offer them.

Fast-forward 20 or 30 years, and those same pastors are heading toward retirement with little saved and not much time left to catch up.

Here’s the good news: your church may be able to help in a very meaningful way—without breaking any IRS rules—through something called a Non-Electing Church 403(b) plan.

Why This Matters

Churches have a unique opportunity to make tax-advantaged contributions directly into a pastor’s retirement account. This isn’t just theory—it’s built into IRS rules specifically for churches.


Even better, these contributions:

  • Are not subject to Social Security or Medicare taxes (SECA/FICA),
  • Grow tax-deferred, and
  • Can often be distributed in retirement as a housing allowance—potentially tax-free.



That’s a triple tax benefit that can make a real difference for someone who spent decades serving the church.

A Chance to “Make It Right”

If your church has a founding or long-serving pastor who never had the chance to build retirement savings, a Non-Electing Church 403(b) allows you to contribute significant amounts—while they’re still on payroll—to help them catch up.

Example:
Pastor Adam planted a church 25 years ago, earning very little in the early years. Today the church is financially healthy, but Pastor Adam (now 62) has minimal retirement savings. By making regular church-funded contributions into a 403(b) plan before he retires, the church can help build a nest egg to honor his decades of service.

The key is timing: these contributions can only be made while the pastor is still employed. Once they retire or leave payroll, the window closes.

What Churches Can Do

Here are practical steps your board or finance team can take:

  • Check your plan. Make sure your church’s 403(b) is set up as a Non-Electing Church Plan (many denominational plans already are).
  • Review your budget. Even partial contributions add up over time.
  • Start the conversation. Pastors often don’t know this is even an option.
  • Work with a professional. A financial advisor familiar with clergy tax law can help you stay compliant and maximize the benefit.

Final Thought

Retirement planning is often overlooked in ministry, but it doesn’t have to be. Your church has the ability—and in many cases, the resources—to help faithful pastors finish well. Even modest contributions today can become a blessing for years to come.

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