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What Work Is Eligible For The Clergy Housing Allowance?

by Monday, February 26, 2024
Picture of a priest administering communion with blog post title: What Work Is Eligible For The Clergy Housing Allowance?

This is an excerpt from the book The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance, which is available in paperback and Kindle format on Amazon.

Treasury regulations state that,

In order to qualify for the exclusion, the home or rental allowance must be provided as remuneration for services which are ordinarily the duties of a minister of the gospel.

Another term the IRS commonly uses for “services which are ordinarily the duties of a minister of the gospel” (since that’s way too long) is “ministerial services.” So, as with everything, in order to determine eligibility for the housing allowance, we need to define ministerial services. IRS Publication 517 states that “Ministerial service, in general, is the service you perform in the exercise of your ministry.” Writing this book is the exercise of my God-given ministry. Does that mean I can take a housing allowance? I wish!

Luckily, they provide further guidance, since that’s about as clear as mud. There are two different purposes for which the US government concerns itself with the definition of ministerial services. One is the housing allowance, which we are discussing, and the other relates to self-employment taxes. As such, the definitions and examples that the government provides for either one apply to the other (in almost all situations). That’s good for us because it gives us a larger body of work to pull from when looking for answers.

Ministerial service is that which you do in the exercise of your ministry. Here are the ministries that you can exercise that qualify you for the clergy housing allowance (and some that don’t): 

Pastors & Church Workers

What we usually think of when we think of a pastor or minister fits well into the IRS’s common definition of someone that conducts religious worship and performs sacerdotal, or priestly, functions. Those activities are hard to define, however, because every religion is different and even denominations within a religion vary widely in their activities and worship. 

Because of this, the IRS doesn’t get into specifics regarding sacerdotal functions and worship. Rather, they leave that up to each minister’s church or denomination. Treasury Regulation § 1.1402(c)-5(b)(2)(ii) allows those definitions to be governed by the tenets and practices of the particular religious body. I appreciate the freedom of religion, but boy does it make my job hard!

Sacerdotal functions usually include things like baptism, performing weddings, and administering communion. These are things that only certain people within the religion are allowed to do. Conducting worship services is similar because in most religions not everyone has the authority to run their regular gatherings. 

The IRS wants to see that your religious body considers you a spiritual leader. You should have special authority and act on it. While there is some ambiguity regarding those that qualify for the housing allowance, the IRS is very clear about some people that don’t. 

According to IRS Publication 517, ministers of music or education and those who serve in administrative or other functions who aren’t authorized to perform substantially all of the religious duties of an ordained minister in your church (even if commissioned as a minister of the gospel) are not eligible to take a housing allowance. As you can see, having authority is key. Overseeing the worship department is not enough. If your church doesn’t view you as a pastor, neither does the US government. 

Workers In Religious Organizations

When it comes to working with religious organizations like religious boards and societies (and their integral agencies), they have a little more to say. First of all, the organization has to be under the authority of a religious body such as a church or denomination. The organization doesn’t have to be directly controlled by the church, though. They consider any organization organized for and dedicated to carrying out the tenets and principles of a faith in accordance with the faith’s rules to qualify. 

However, you can’t just slap a fish on it and call any organization Christian. Your church or denomination probably has certain requirements or sanctions governing the creation of their institutions, and those must be followed for your organization to be legitimate.

Within the organization, you have to also perform legitimate work for it to qualify as ministerial services. Being the janitor for a religious society is not enough. You need to control, conduct, or maintain the organization (and not the kind of maintenance that janitors provide). 

What they mean is that you need to be involved in directing, managing, or promoting the activities of the organization. Likely, it will require a leadership position within the organization. You can run a department within your denomination’s Missions Board, and though you aren’t preaching and burying people, you are performing ministerial services in the eyes of the IRS. Is this getting complicated enough for you yet? Keep reading, it gets even better!

Pastors In Secular Settings & Government

You don’t actually have to work in a church or religious organization for your activities to qualify as an exercise of your ministry. As long as you’re conducting worship and performing sacerdotal functions, those are ministerial services even if performed in secular society. 

A good example of this is campus ministries. Most colleges are not religious organizations by any stretch of the imagination. Yet, many pastors work on campuses leading services and counseling students. These campus ministers are pastors through and through, and the IRS does not deny it.

The same does not ring true for government workers, though. If you are a US military chaplain, your services do not constitute ministerial services for the sake of the clergy housing allowance. You are considered to be functioning as a commissioned officer, not a minister exercising his ministry. Also, a chaplain in a state prison or government-owned hospital that is a government employee is considered to be acting as a civil servant of the state and not as a minister of the gospel. We’ve got to keep church and state separate, after all. 

Church Assigned Positions

Even if you aren’t performing typical pastoral duties and you aren’t working for a religious organization, if you were directed by your church to take the position, it can count as ministerial services. The services must be assigned or designated by the church to qualify. 

Be careful about trying to twist this provision in your favor if you have secular employment, though. This situation only works if your church assigned you to the position for reasons directly related to the purposes of the church. People with secular employment have gone back and had their church “assign” it, and it hasn’t ended well for them. 

Work In A Religious School

Administrative duties and teaching responsibilities in a church school, college, or university qualify as ministerial services for the sake of the pastoral housing allowance. The key is that it must be a religious school. The same duties in a non-church school do not qualify. However, if a secular school provides you with faculty lodging, it may be tax-exempt because of another rule. IRS Publication 525 can give you more information about that. We only care about the pastoral housing allowance in this book.

Theological Students

If you are a theological student, just acting like a pastor is not enough to qualify you for the clergy housing allowance. When serving a required internship as a part-time or assistant pastor you can’t exclude a parsonage or rental allowance from your income unless you are ordained, commissioned, or licensed as a minister. 

Traveling Evangelists

Traveling evangelists who are ordained ministers are eligible to take a housing allowance from the money given to them by churches located away from their home community. This comes from Revenue Ruling 64-326, which allows for the housing allowance of an ordained minister to be paid by multiple churches. All of the same rules apply, so it must be designated in advance in writing and used to maintain a permanent home. 

Missionaries

For missionaries who are ordained, licensed, or commissioned ministers, all of the same rules apply. Whether or not a missionary should claim a housing allowance, though, will depend on their personal tax situation. There are a lot of complex rules surrounding Americans abroad and they are beyond the scope of this book. 

If you’re a missionary, just know that you’re still subject to US taxes no matter where you live and you really should work with a tax preparer or financial planner that understands expat taxation. If you try to do it yourself, you’ll either die of boredom or make costly mistakes. The costly mistakes can even happen if you work with a professional if they’re not experienced in working with Americans abroad. Please, please, please, believe me on this one. And thank you so much for what you’re doing. The rest of us really admire and appreciate it.

If you want to learn more about the clergy housing allowance, pick up a copy of The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance on Amazon today!

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Who Is Eligible For The Clergy Housing Allowance?

by Monday, February 19, 2024
Picture of a person holding a book with a question mark over their face with blog post title: Who Is Eligible For The Clergy Housing Allowance?

One of the greatest financial benefits available to pastors is the housing allowance exemption. This comes in two forms: the minister’s cash housing allowance and parsonage allowance. These allow “ministers of the gospel” to exempt all of their housing expenses from federal income taxes. That can be worth quite a bit of money, so who are these “ministers of the gospel” that are eligible to take advantage of it?

The Bible calls us all to be ministers of the gospel but I don’t think that’s what the IRS has in mind. And “gospel” is a very Christian word but you know the US government would not give special benefits to Christians and not other religions. That would be unconstitutional. So who is eligible for this awesome tax benefit, then?

IRS Definition Of A Minister

The IRS defines a minister as:

Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. Ministers have the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination. 

If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes. 

As you can see, there are two main components to being a minister eligible for the housing allowance. You have to have the right authority and participate in the right activities. Let’s break those down for more clarity:

You Need The Necessary Authority

You must be ordained, commissioned, or licensed and it has to be by a religious body constituting a church or church denomination. However, the law does not spell out what constitutes a church or denomination. Rather, our definitions are based on case law, or previous court rulings.

There are two things that have been established as the bare minimum for something to be called a church:

  1. A body of believers or communicants

  2. The body of believers assembles regularly in order to worship

On top of that, assembling to worship must be the main purpose of the body of believers. Because of this, schools that have chapel services do not qualify because their purpose is educational and their worship services are incidental. Also, faith-based companies that have regular Bible studies or devotionals for their employees do not qualify because their purpose is business and their religious gatherings are incidental.

Once you determine that your church or denomination qualifies, you have to make sure the position they have given you qualifies. You must be “ordained, commissioned, or licensed.” If you have the same authority as someone with one of those titles but lack the title, you could argue that you are eligible for the housing allowance. Jewish cantors did and won the right to claim a housing allowance.

You Need To Provide Pastoral Services

Treasury regulations state that,

In order to qualify for the exclusion, the home or rental allowance must be provided as remuneration for services which are ordinarily the duties of a minister of the gospel.

Just having the right title is not enough to qualify you for the housing allowance exemption. It must be given to you in exchange for your services which are ordinarily the duties of a minister of the gospel, or simply “ministerial services” as the IRS often refers to them.

If you’re a pastor in a church, what the IRS wants to see is that you do things like baptize people, perform weddings, administer communion, and run church services. Things that not just anyone in the church is allowed to do. 

The IRS doesn’t get into a lot of specifics about it because different religions vary greatly. They do, however, state that ministers of music or education and those who serve in administrative or other functions who aren’t authorized to perform substantially all of the religious duties of an ordained minister in your church (even if commissioned as a minister of the gospel) are not eligible to take a housing allowance. 

There are some other positions that qualify as providing ministerial services besides just being a traditional pastor:

  • Workers in Religious Organizations. You must have a leadership or key role in an organization that is under the authority of a church or denomination and exists to carry out the tenets and principles of the faith. An example would be a denominational missions board or religious society.

  • Pastors in Secular Settings. If you do the duties of a pastor but outside the church in a secular setting, that still qualifies. An example of this would be a campus minister.

  • Chaplains. Chaplains in church-related or nonprofit health and welfare institutions are eligible for the housing allowance. Chaplains in government-owned hospitals or with the US military are not eligible because they are said to be functioning as government employees and not ministers.

  • Church Assigned Positions. Even if you aren’t performing typical pastoral duties and you aren’t working for a religious organization, if you were directed by your church to take the position, it can count as ministerial services. The services must be assigned or designated by the church to qualify. 

  • Work in a Religious School. Administrative duties and teaching responsibilities in a church school, college, or university qualify as ministerial services for the sake of the pastoral housing allowance. The key is that it must be a religious school.

  • Traveling Evangelists. Traveling evangelists who are ordained ministers are eligible to take a housing allowance from the money given to them by churches located away from their community as long as it is designated in advance in writing and used to maintain a permanent home. 

  • Missionaries. Missionaries are eligible for the housing allowance just as pastors are.

So, to be eligible to claim a ministerial housing allowance you need to have been given authority by a qualifying religious body and you need to receive it in exchange for pastoral services that you provide. 

Don’t forget to check out our Housing Allowance Calculator and Housing Allowance Book!

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Top 10 Personal Finance Blog Posts for Pastors of 2023

by Monday, January 1, 2024

Congratulations, you made it to 2024! Whether you triumphantly marched into the new year or skidded in on your knees like me, I hope 2024 turns out to be your best year yet.

As I have in most previous years, today I’m offering up a list of the Pastor’s Wallet’s 10 most popular articles in 2023, based on views. If you haven’t had a chance to read these yet, you may want to.

  1. How Much Housing Allowance Can A Pastor Claim?

The top-performing blog post of the year was the question that gets to the bottom line of one of the biggest financial benefits for pastors. Updated early in 2023, this post offers the basics of what you can actually claim as a clergy housing allowance. 

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

The natural follow-up to the first article’s question, this one goes into more detail on what can actually be claimed as housing allowance and what has been definitely ruled out by the IRS. It’s also an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance. 

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

The housing allowance seems to be the most popular topic around here, doesn’t it? This article answers a more complicated question that actually originated with a reader, that of IRS reporting. If you haven’t had the time to read it yet, I would highly recommend it for your own peace of mind. 

  1. Claiming A Minister’s Housing Allowance In Retirement

Here’s another housing allowance topic that is important for you to know, ESPECIALLY if you’re getting close to retirement. There are a lot of undefined gray areas when it comes to claiming the housing allowance in retirement, but this excerpt from my book lays out the most important parts that we know for sure. 

  1. Health Insurance For Pastors: What Are Your Options?

Finally, we’ve gotten away from the housing allowance! And on to the stressful topic of health insurance. Many churches cannot afford to pay for health insurance for their pastors, so it’s important to be familiar with the other ways that churches can help and also the options that pastors have on their own. 

  1. Secular Jobs For Pastors: 9 In-Demand Skills You Already Have

This is the oldest blog post on this list and also the one that brings me the most sorrow. It’s the oldest because it is still completely relevant and I haven’t come up with a way to improve it. It brings me sorrow because I wish the body of Christ took better care of our shepherds so that they didn’t need to be making secular resumes. 

  1. How To Calculate Fair Market Rental Value

And we’re back to the housing allowance again! One of the major limitations placed on the clergy housing allowance is that it cannot exceed the fair market rental value of the home. (If you’ve read my book, you know which popular pastor and author inspired the addition of that rule!) This article helps you figure out how to calculate that.

  1. Your Top 10 Clergy Housing Allowance Questions Answered

This article is a great place to find all of the basics of what the clergy housing allowance is and how it works all in one place. If you only send one link to that new pastor on your staff, this should probably be it. 

  1. Why Don’t Churches Pay Payroll Taxes For Ministers?

This is one of those questions I’m going to ask when I get to heaven since I’m sure the IRS doesn’t even know why they have it set up this way. Even though I don’t know the reason behind this particular setup, this article will explain it so that you can pay your taxes properly, which I highly recommend that you do. 

  1. How Does The Minister’s Housing Allowance Affect Social Security Retirement Benefits?

This article jumps into the intersection of two major topics that are handled uniquely for those in ministry. It covers both the effects on the housing allowance while you’re working and accumulating benefits and also once you start collecting benefits. It also includes two questions you can ask to determine if the tax professional you’re talking to actually understands clergy finance. This is a must-read for every pastor.

Honorable Mention

While those are the top 10 articles of the year, there was actually a page on the site that isn’t a blog post that had more views than all but article #1: our housing allowance calculator. With just shy of 10,000 views, I felt a little bit guilty leaving it out. If you want an easy online calculator to estimate your housing allowance and even add in a 10% cushion, you should check it out too!

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How To Conquer The Holiday Season With Your Contentment Intact

by Monday, November 20, 2023
Picture of a happy Christmas elf with blog post title: How To Conquer The Holiday Season With Your Contentment Intact

Because of Thanksgiving this week, I wanted to take a break from the usual technical stuff and write a blog post about thankfulness. It’s not something you’ll find in any IRS publication, but it is a financial issue. As I Timothy 6:6-10 says, 

But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. (NIV)

Contentment is a powerful protective covering over our hearts and it originates in thankfulness. As such, thankfulness is the foundation of a God-honoring life, one that leaves us satisfied.

I was reminded of this recently when I saw some pictures from four years ago. My daughter has always been the last in the family to wake up, but one morning I came downstairs to find her writing a song. She had woken up with a worship song on her heart so she was writing it out. This is what she wrote:




The following morning, she did the exact same thing. As soon as she woke up, she went right to work writing. Here’s her second song:



What really struck me about her songs was not the creativity or even the fact that she was writing them, but that they were both centered on thankfulness. Her little 6-year-old heart woke up in the morning overflowing with thankfulness. How wonderful is that?

Don’t you wish we could all be that way? Just gushing with gratitude every step of the way on this journey called life?

But it’s hard. We are always cognizant of all the Lord has done for us and I think most of us are grateful on an intellectual level. Sometimes, though, it’s hard to get our feelings to match with what we know in our heads. 

I think God orchestrated things to have Thanksgiving right before Christmas as a way to prepare our hearts for the commercialized mayhem that the holiday has become. There is no other time of year when materialism rears its ugly head more strongly. 

Does the Christmas season ever leave you thinking…

I wish I could afford to get my son that virtual reality headset all of his friends are getting for Christmas. He’s going to feel so left out.

I wish I had a house with a beautiful staircase and banister to drape with Christmas garlands. I’m embarrassed to have people come and see my pathetic Christmas decorations in my little, old house.

I wish I could afford to buy my wife that diamond necklace in the catalog she’s had on the kitchen counter. Oh, how her eyes would light up to receive a little box on Christmas morning.

My kids are so excited for Christmas, I hope they’re not too disappointed that we can only afford one gift for each of them. 

The time leading up to Christmas (which keeps getting longer and longer) is when every retailer sets out to show you all the wonderful things that you never knew you needed or wanted. They are opening your eyes to everything you’re missing out on, much as the fruit of the tree of good and evil opened Adam and Eve’s eyes. In opening your eyes, they are also opening your heart to discontentment. 

Why are so many people sad over the holidays? Because they are focusing on everything they don’t have. The loved one that passed away; the newest iPhone; the normal, functional family that makes beautiful memories together instead of ending the night in cold silence; gifts overflowing from under the tree for their beloved children; a handsome sweetheart like in the Hallmark movies; a beautiful house covered in twinkling lights. 

It’s like the devil has tried to turn the beautiful message of Christmas, Emmanuel, God with us, to Look at all of the wonderful things that you don’t have and you’ll never be able to have.

Don’t fall for it. Fight against it. Even if you hardly have two pennies to rub against each other, you still have so much.

During this holiday season when ungratefulness and discontentment are crouching at the door, focus on what you do have instead of what the world is trying to sell you. Look for the silver lining even on things that you would never consider to be a blessing.

Are you broke? Jesus said that it’s harder for a rich man to get into heaven than for a camel to go through the eye of a needle. If you are completely self-sufficient, what use do you have for God? Thank the Lord for giving you a way to constantly draw near to Him and learn to depend more fully on him through your lack of finances. 

Are you missing a loved one? Thank God that they are in his presence, free of pain and sorrow, and you’ll get to see them again one day. If that’s not true, thank him for the motivation that their passing provides for you to share his love with others so that they don’t face the same fate. 

Are you far from your family? For some people, that in itself is a blessing. If you miss your family this holiday season, thank God for the extra time and attention that their absence provides that you can use to identify and reach out to others who are lonely and struggling.



Are you struggling with debilitating health problems like I am? (Yes, I still have long covid and no, it hasn’t really improved this year.) At least you’re still alive. As long as we’re still breathing, there’s hope for healing. Instead of focusing on what you can’t do anymore, focus on what you still have, whether it’s some physical capability, loved ones, or even just the technology you’re reading this on.

Are you envious of your friends who have nicer houses and more money to spend than you? Thank God you have friends and you’re welcome in their beautiful homes!

This holiday season, the world will try to get you to focus on everything you don’t have. 

DON’T DO IT. 

Stop what you’re doing right now and make a list of at least ten things that you’re grateful for. This is Thanksgiving week, it should be easy for you.

Don’t just think of them, though, you need to write them down. Write them down and print out your list. Put one next to your TV so that when the commercial comes on with the beautiful person with expensive jewelry having a great time at a holiday party, you can remind yourself of how blessed you are instead of longing for what they have.

Put a copy of your list by your computer so that when you get all of the spam from retailers, you can remind yourself that you have all you truly need. Put a copy in your purse or wallet, so that when you go to buy something, you are reminded of what really matters in life.

Instead of letting the commercialization of Christmas get you down this year, face the season with gratefulness and thanksgiving. If you need to, write a song like my daughter’s and start every day with it. Contentment is a shield that will protect your heart and right now is the time to gear up to defend it in the weeks to come.

And for any parents out there who feel bad that they can’t do more for their kids this Christmas, it’s going to be okay. My family didn’t even celebrate Christmas when I was young and when we started, there wasn’t much money for gifts. But that never affected my perception of my parents’ love for me or my security in them as providers. And I like to think that I turned out pretty well, in spite of it all. Your kids will too.

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What Is The Deadline For Pastors To Opt Out Of Social Security With Form 4361?

by Monday, October 9, 2023
Picture of an alarm clock with blog post title: What Is The Deadline For Pastors To Opt Out Of Social Security With Form 4361?

We recently went over Form 4361, the IRS document used by pastors to receive an exemption from self-employment taxes. If you’re not familiar with it, you should go back and read about it here.

One thing we didn’t discuss in that article, though, was the timing. That’s because I didn’t want to overwhelm you with too much information. So, today we are discussing the timing involved and I will give you multiple examples to make things as clear as possible. It is important that you understand when Form 4361 can be filed because once your window of opportunity is gone, it is gone forever.

Is There A Time Limit For Pastors To File Form 4361 To Opt Out Of Social Security?

Specific dates are requested on the form because you only have a small window of time in which you are allowed to opt out of Social Security. Form 4361 must be filed by the due date, including extensions, of the second tax year in which you have $400 or more of net earnings from self-employment, any of which came from ministerial services.

That’s kind of long, so let’s break it down in reverse:

Earnings From Ministerial Services

The clock starts ticking when you have earnings from ministerial services. The IRS defines ministerial services as the services you perform in the exercise of your ministry. Usually, that would be wages earned or offerings received as a pastor. However, if you perform a wedding and the father of the bride gives you a $50 bill, that also counts as earnings from ministerial services. Basically, any money given to you because of some pastoral thing you did counts.

$400 Of Net Earnings From Self-Employment

You need to have at least $400 of net earnings from self-employment for the tax year in question to count towards the time limit. It is important to note that you don’t have to have $400 of ministerial income. Other non-ministerial self-employment income counts towards the $400. Even if you only earn the $50 for performing the wedding, if you earned at least $350 in your secular side gig, it counts towards your two years.

Second Tax Year

The deadline to file Form 4361 is based on two tax years. Tax years are calendar years and for this situation, they do not have to be consecutive. So, if you earn at least $400 of pastoral income one year and none the next, the deadline to request an exemption will not be triggered until the next year that you have sufficient ministerial income.

Due Date, Including Extensions

Finally, the due date for your Form 4361 is the due date for your tax return, including extensions. Tax returns are usually due on April 15 of the following year. Sometimes the date gets pushed back a day or two if the 15th falls on a weekend or holiday. In addition, everyone is eligible to file for a 6-month extension to file their return, which pushes the date to October 15.

Let’s take a look at how this might look in real life.

Examples Of How It Applies In Different Situations

Let’s look at an example. You get licensed and start a regular pastoral job in 2021 which pays you $50,000 a year. That means that your first tax year is 2021 and your second tax year is 2022, so you have to file Form 4361 by the due date for your 2022 tax return. That was April 18, 2023, but you could file an extension until October 16, 2023. So, you need to submit your Form 4361 by October 16, 2023.

Here’s another example: You get ordained in 2020 and work part-time, earning $10,000. Then, you take two years off and earn no ministerial income. In 2023 you do a few weddings and earn $500. Your deadline for filing Form 4361 will be the due date for your 2023 return. Even though you were ordained in 2020, the following two years, 2021 and 2022, don’t count towards the time limit because you had no pastoral income during those two years.  

One final example for the entrepreneurs out there: You have a small side business that generates $5,000 a year. You are ordained in December 2022 and earn $80 as a pastor that year. The next year, 2023, you work full-time as a pastor and earn $60,000. Your Form 4361 is due by the due date for your 2023 tax return. Even though your ministerial income was below $400 in 2022, your other self-employment exceeded the limit so that year counts.


It is vital that you understand the timing required for filing Form 4361. If you don’t file by the deadline, you forever lose the opportunity to opt out. There are no second chances here.

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Financial Planning & Speaking Engagements With The Pastor’s Wallet’s Amy Artiga

by Monday, October 2, 2023
Picture of Christian financial planner Amy Artiga, CFP

I recently announced that I have obtained the Certified Financial Planner™ designation. As a result, I got a number of responses asking what kind of services I offer as a financial planner. One generous reader even wisely told me, “a more ‘aggressive’ tooting of your own horn would be appropriate.”

I hear you. Today I’m going to tell you about what I do beyond this blog, in case you want to be a part of it. 

Financial Planning Services

I offer financial planning services through Guide Financial Planning. This is a different company than Pastor’s Wallet and I do not own it. Financial planning and investment management is a very highly regulated industry so it requires a different business entity than the educational content I provide through Pastor’s Wallet.

I was originally planning on starting my own financial planning firm in order to have complete control over my schedule, who I serve, and how I serve them. I wanted a flexible schedule where I could put my family first and I didn’t just want to work with wealthy people‒I wanted to provide comprehensive financial planning for pastors and the middle class. 

Then I found Guide Financial Planning. 

At Guide, I have flexibility and get to do everything I want to do without having to go through the trouble and regulatory burden of starting my own financial planning firm. On top of that, I get to work with a wonderful team of people that have my back when I’m sick and help me out with my work and are also a joy to be around. Guide was serving pastors even before I showed up‒I consider it a match made in heaven.

Comprehensive Financial Plan

Through Guide Financial Planning, I offer three services; two of which are one-time engagements and one is ongoing. Our core initial offering is a comprehensive financial plan. This is a comprehensive overview of every area of your financial life, including cash flow and budgeting, retirement planning, investments, taxes, housing allowance, Social Security, estate planning, debt, and any other topic that is relevant to your situation. You can read a more in-depth description and see sample financial plans here.   

Quick Start Session

For those who are not ready for a comprehensive financial plan or just have a few key questions, I do something called a Quick Start Session. This is just a 1 ½ hour video call where I address your most pressing issues. Examples of that would be looking at retirement projections to see how long your money may last, analyzing what to do with an inheritance or how best to pay off debt, or even just a starter session for a new pastor where I can explain all of the uniqueness of clergy finance and help you figure out how it applies to your life. 

Ongoing Financial Planning

Those are the two one-time services that I provide. For those who do a comprehensive financial plan, they have the option of continuing with ongoing financial planning services. This is perfect for people who don’t like managing their finances on their own, need accountability in order to be a good steward, or want to make sure their spouse will be able to take things over as easily as possible if something happens to them. 

With this service, I will walk with you through life. We will meet twice a year and connect as often as you need in order to have confidence that you are on top of things and headed in the right direction. I can also manage investments for my ongoing clients, though that is not a requirement to work together. You can read more about ongoing financial planning here. 

If you are interested in any of the three financial planning services I just discussed, you can schedule a free introductory call to learn more and tell me about your situation here. Please only schedule a call with that link if you are actually interested in financial planning. For all other things, such as questions about how clergy finances work, please email me at amy@pastorswallet.com. 

Speaking Engagements

In addition to the financial planning services that I offer through Guide Financial Planning, I also do speaking engagements through Pastor’s Wallet. I love doing webinars for churches, denominations, and other groups. The fee for a 60-75 minute webinar that includes Q&A is currently $500. I do a very limited number of in-person speaking engagements for conferences and retreats, which you can email me about if you’re interested. 

People often ask me how I make money from Pastor’s Wallet since there are no ads. The truth is, I don’t really. The bulk of my income comes from financial planning through Guide FP. As far as Pastor’s Wallet is concerned, I only make money from speaking engagements and book royalties, which is enough to cover the costs of the website plus a little. I could probably make a lot more if I put advertisements on the blog, but I just find those so annoying that I don’t have the heart to do that to you. 

How Do You Know If You Need Financial Planning?

Let me end with a quick story. I grew up in Southern California. Once when I was a teenager, my friends and I stayed at the beach late and before we left a thick fog had rolled in from the ocean. By the time we got to our car, the fog was so thick that we could not see which way to go to get out of the parking lot. 

I ended up having to get out of the car and walk in front of it staring at the ground while my friend slowly rolled along behind me with the headlights on. We inched along for quite awhile until I found a curb and was able to follow it to the parking lot’s exit. Even now, decades later, I remember the emotions I experienced that night. It was incredibly unnerving not to be able to see where we were or what way we needed to go to get out of there. 

If that’s how you feel with your financial life, then you need a financial plan. A financial plan won’t change anything about your current situation. What it will do is lift the fog and give you a clear picture of where you currently are and what steps you need to take in order to go where you want to go in life. 



Here are some other articles you might find helpful:

What is Financial Planning?

What is Financial Planning for Pastors?

What Does the Bible Say About Financial Planning?

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What Is Form 4361 & What Is It Used For?

by Monday, September 25, 2023
Picture of Form 4361 with blog post title: What Is Form 4361 & What Is It Used For?


If you’re new to the ministry, you may have heard about Form 4361 from someone. Likely another pastor has mentioned it and told you that it will save you a lot of money. What is this mysterious money-saving piece of paper?

What Is Form 4361?

Form 4361 is an IRS document that is used by ministers to opt out of public insurance programs. You can view the form itself here. Its official name is Application for Exemption From Self-Employment Tax for Use By Ministers, Members of Religious Orders and Christian Science Practitioners, which is why most people just refer to it as Form 4361.

The title references being exempt from self-employment tax because that is what is used to fund the public insurance programs Social Security and Medicare. An exemption means you don’t have to pay the taxes but you also don’t get to benefit from the programs (based on your exempt ministerial income).

The form includes your personal information, contact information, and also the information for the church or body that ordained, licensed, or commissioned you. You also have to give information regarding the date you were ordained, licensed, or commissioned, and when you have received $400 or more in self-employment income, at least some of it as compensation for ministerial services. That is because you have a limited time in which you are eligible to file the form and claim an exemption.

The Opportunity To Opt Out Of Self-Employment Taxes

As already mentioned, self-employment taxes are the 15.3% that ministers have to pay to fund Social Security and Medicare (even if you’re an employee of a church). Social Security is the safety net program that the US government developed in response to the crisis of the Great Depression. It has evolved over the years and now provides retirement benefits, survivor benefits, and disability benefits. Medicare is the program that provides healthcare for Americans over age 65.

Unlike most everyone else, pastors have the option to opt out of participation in these programs, and therefore, their taxes. Don’t you feel special?

Not all pastors can opt out, though. You can only opt out if you can sincerely say, “I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.)”

Why Would A Minister Opt Out?

It is illegal to opt out for economic reasons. The IRS makes that very clear. A legal exemption is based on one of two things:

  1. Conscientious opposition to the acceptance of public insurance
  2. Religious principles that oppose the acceptance of public insurance

So, it has to be either your conscience or your religious principles that drive the decision. The decision itself is about public insurance, which encompasses Social Security and Medicare.

I know a lot of pastors who opt out do so on the basis of the principle of stewardship. Everything we have is God’s and we are instructed to manage it wisely. Giving it to the government to mismanage is not good stewardship.

The Bible says that “a good person leaves an inheritance for their children’s children.” (Proverbs 13:22, NIV) Because of this, some pastors feel that it is wrong to prepare for the future by putting money into a system that won’t leave an inheritance for your children when you can easily save in a way that does.

For others, they equate accepting public insurance as relying on the government for provision instead of God. Dependence on the government violates their conscience and religious principles so they have grounds to request an exemption.


Warnings For Ministers Who Opt Out Of Social Security

Whether or not you choose to opt out is a personal decision that you need to pray and think deeply about. You will find some very strong opinions on the matter online, but I’m not here to tell you what decision to make. I do need to warn you, though, of the consequences of your decision.

If you choose to opt out of Social Security, you need to make up for the benefits the program provides on your own. You need to provide your own retirement savings, life insurance, and disability insurance. You can read all about how to do that here.

Some other articles that you might find useful are:

Opting Out Of Social Security: A Step By Step Guide

What You Need To Know About Social Security Even If You’ve Opted Out

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

How Medicare Works For Pastors Who Have Opted Out Of Social Security

Can Pastors Opt Back Into Social Security?

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What is a Social Security Offset & How Does It Work?

by Monday, July 31, 2023
Picture of a chalkboard with calculations and blog post title: What is a Social Security Offset & How Does It Work?

As you probably know if you read this blog (or can find out here), pastors have to pay both the employee and employer portions of Social Security and Medicare taxes as if they were self-employed. Those Social Security and Medicare taxes are also called SECA taxes, which is a lot faster to type so that’s what I’m going to call them from here on out. 

What Is A SECA Offset?

Some churches feel kind of bad that their pastors have to pay twice as much in SECA taxes than any other employee in the US. Since they aren’t allowed to pay SECA for their pastors, they instead pay them a little extra to cover the cost of the tax. That extra pay is called a SECA offset or Social Security offset. 

Even though it’s called a SECA offset, it’s technically just additional pay. In the eyes of the IRS, it’s just more taxable income. Even the church doesn’t really have any control over how the pastor uses that money. Unless the pastor is into tax evasion, though, I don’t think churches need to worry about whether or not it’s going towards SECA. 

How To Calculate The SECA Offset

When a church decides to pay their pastor a SECA offset, the next question is how much it should be. This is more complicated than it sounds. If you google it or read finance articles, you will see that usually the employer pays 7.65% and the employee pays 7.65% and pastors pay 15.3% SECA. But that’s not exactly right.

When you look at Schedule SE, which is the tax form used to calculate SECA, you’ll see that that tax rate is only applied to 92.35% of income. That means 7.65% is SECA-free. If you calculate that out, it means that half of a pastors SECA taxes are only really 7.0648% of the pastor’s income. 

Wait, that’s not all. The SECA offset is subject to federal and state income taxes as well. That means the SECA offset will increase the pastor’s income tax liability. Does the church need to offset that as well? It’s up to the church!

Whereas the SECA calculation is the same for everyone, different pastors are subject to different income tax rates. A pastor with a stay-at-home spouse may be in a 10% tax bracket while a pastor married to a cardiologist could be in a 35% tax bracket. Should the church calculate each SECA offset differently depending on the individual pastor’s tax situation?

How Much Should Churches Pay In SECA Offset?

I think if you ask the church to get that granular and specific, they’ll just give up on paying a SECA offset altogether!

My advice would be to just pick a calculation method and stick with it for everyone. Whether you do 7.65% or 7.0648% or something higher to help with income taxes, it doesn’t really matter a lot. The difference between 7.65% and 7.0648% of $100,000 is only $585. And most pastors don’t even make $100,000 so their difference would be even less. 

Pastors, don’t complain about tenths of a percent. Just be grateful your church is helping you out with this, many pastors don’t get any kind of offset. Churches, just pick something that won’t be too complicated for your poor volunteer treasurer and make her want to quit. How about a nice round 8%? 

If you get paid a SECA offset, let us know the calculation your church uses in the comments!

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You Just Had A Baby. Now What?

by Monday, July 3, 2023
Picture of baby feet with blog post title, you just had a baby. Now what should you do?

Having a baby comes with a lot of responsibility and a long to-do list. Here are the things you should do legally and financially to set yourself up for success once your little one arrives.

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Should I Invest My 403(b) (Or IRA) In A Target Date Fund?

by Monday, June 5, 2023
Picture of man throwing a dart with blog post title: Should I Invest My 403(b) (Or IRA) In A Target Date Fund?

This post mentions some specific investments. They are only examples and not an endorsement of those investments.

Perhaps the most difficult, or at least most intimidating, thing about saving for retirement isn’t finding money to set aside, but rather choosing how to invest that money. After all, 1 in 5 Americans who aren’t invested in the stock market says it’s because they “don’t know enough.”

What Is A Target Date Fund?

Because of this, in 1994, a new kind of mutual fund was created: the target date fund (TDF). It is a kind of investment designed so that you can just put your money in and forget about it until it’s time to take your money out. You will recognize them because they have a future date in their name, like LifePath Index 2040 Fund or T Rowe Price Retirement 2040 Fund.

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