Browsing Category Housing

The following is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance: Calculating By now you understand who is allowed to take a clergy housing allowance and the process by which you can do so. But here’s the big question everyone has: how do you know how much of a housing allowance to request? First of all, there are limits to the amount of housing allowance that the IRS will allow you to claim. Your maximum allowed ...

Lately, I’ve seen people recommend that pastors who have paid off their mortgages should take out home equity lines of credit (HELOCs) to extend their housing allowance. The idea is that without a mortgage you cannot claim as much in housing allowance so taking on new debt related to your home will allow you to increase your housing allowance and save on taxes. That is not a good idea. First of all, depending on the interest rate on your HELOC, you ...

Lately, I keep getting asked if chaplains at government-owned organizations are eligible for the housing allowance. As I stated in my book on the housing allowance, I was under the impression that government employees other than those in the armed forces are eligible for the housing allowance because on page 9 of IRS Publication 517 it says: However, other sources make it appear that chaplains in government-owned hospitals are not eligible for the housing allowance. Honestly, I’m not really sure anymore. ...

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 ...

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 ...

The clergy housing allowance is touted as the greatest tax benefit available to pastors. And it really is a great benefit. I learned back in 2019, though, that it can have a dark side. Not a Darth Vader using the Force to crush you kind of a dark side, more like a "If I hadn't claimed so much, I'd be $1,000 richer" kind of dark side. The problem is how it can affect the Additional Child Tax Credit, which is ...

One of the benefits of being a pastor is getting to claim an income tax-free housing allowance. Not having to pay income taxes on part of your income can be a great benefit, so it's one I always recommend that pastors maximize. But how do you maximize it? What Is The Maximum Allowed Housing Allowance? The first step in maximizing your housing allowance is knowing how much you’re allowed to claim in the first place. There are limits and some people ...

The following is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance: The IRS says it’s still possible to claim a housing allowance even after you retire and stop receiving a paycheck. Unfortunately, there is no clear law or hard and fast rules about this. There is little guidance and not a lot of certainty, so what we do know is cobbled together from various Revenue Rulings issued by the IRS.  Even in retirement, the rules ...

https://youtu.be/qOU7x0PEA1I Additional principal payments are qualified expenses for the clergy housing allowance, but they are subject to limitations.

https://youtu.be/rxAM8VRzFlI Does the way you pay your taxes affect your ability to claim a housing allowance? What determines if you can claim a housing allowance or have to pay self-employment taxes? Do you have to pay taxes on the housing allowance?