I’m pleased to announce that my first book is now available for sale on Amazon! The Pastor’s Wallet Complete Guide To The Clergy Housing Allowance is a comprehensive look at all things housing allowance.
The Story Behind The Book
Last February, I sat down to put together a downloadable resource about the housing allowance since it is a common topic of reader questions. As I started my research, I thought to myself, you could write a whole book about this stuff!
And so I did.
I spent hours in research, reading through IRS documents, tax court cases, and the Internal Revenue Code. If you think that sounds incredibly boring, you’re right. I would much rather read a John Grisham novel than anything put out by the IRS.
But I’ve met too many pastors who are paying taxes unnecessarily because they don’t understand how the housing allowance works. And I’ve heard from too many financial professionals who can’t give their clients good advice because they struggle to find accurate information regarding the housing allowance.
God calls some people to pastor churches. He calls others to take the gospel to unreached people groups. I guess he’s called me to read IRS documents. I’d rather take that than Hosea’s call any day, though.
What Is In The Book?
I tried to put everything there is to know about the housing allowance into this book. Unlike Hollywood, I’m not planning for a sequel. There are no intentional cliff hangers here. That’s why I called it the Complete Guide. This is about as good as it gets. Here is an outline and summary of the book:
The Law: What’s This All About?
I started the book with a brief overview of the law itself. It is important to understand how tax law works so that you can understand why there are so many gray areas. This section provides the background for how we know what we do about the housing allowance. As I state in the book, it is optional reading for those who like to know why?
Eligibility: Who Is A Minister Of The Gospel?
The second chapter is where it starts to get really practical. Before you get into the details of the law, you need to know who it applies to in the first place. There are three things you must define in order to know who is eligible for the minister’s housing allowance:
- What qualifies as a church or denomination?
- Who is a minister of the gospel?
- What qualifies as ministerial services?
In this chapter, we see how the law applies to pastors and church workers, workers in religious organizations, pastors in secular settings and government, workers in church-assigned positions, workers in religious schools, theological students, traveling evangelists, and missionaries.
Process: How To Claim The Housing Allowance
Once you establish eligibility, the big question is how to go about claiming a housing allowance. In this chapter, we break down the responsibilities between the church and the individual pastor, look at the proper timing for requesting an allowance, and how to calculate your housing allowance. Then we get into eligible expenses and what the law says about:
- Combining the parsonage and cash housing allowance
- Down payments
- The mortgage interest deduction
- Home equity loans and home equity lines of credit
- Cash-out mortgage refinancing
- Prepaid expenses
- Multiple homes
- Clergy couples
- Generating income with your home
Taxation & Other Government Programs
The next chapter looks at how the housing allowance affects federal income taxes, payroll taxes, and state income taxes. We discuss how the housing allowance should be reported to both the pastor and the IRS and what happens when you over or underestimate your expenses. Finally, we look at how claiming a housing allowance affects the following:
- Retirement contributions
- Social Security benefits
- Supplemental Security Income (SSI)
- Social Security Disability Income (SSDI)
- Free Application for Federal Student Aid (FAFSA)
- Children’s Health Insurance Program (CHIP)
- Premium tax credit (Obamacare subsidy)
- Medicaid
- Medicare Savings Programs
- Medicare premiums
- Earned Income Tax Credit (EITC)
- Child Tax Credit
- Additional Child Tax Credit
- Unreimbursed business expenses
The Finish Line: Claiming A Housing Allowance In Retirement
Did you know that you might be able to claim a housing allowance in retirement? It’s true, and this book will tell you how to do it. It covers the dangers of IRA rollovers, partial retirement, SECA taxes, required minimum distributions, IRS reporting, and what happens when your spouse dies. If you want a housing allowance in retirement, it’s important to read this before you retire.
Legal Challenges: Gaylor v. Mnuchin
We end with a look at the recent legal challenges that the housing allowance has faced. While it is safe for now, it is important to understand the legal arguments for how it is being attacked and how it has been defended. In light of all of that, the book ends with some considerations of the future implications and what you should do going forward.
Buy Your Copy Today!
If any of that sounds as if it would be helpful to you, I encourage you to get a copy. This isn’t the kind of book that you take to the beach, read through cover-to-cover, and then toss aside. It is more of a reference tool that will sit on your shelf, gathering dust, except for the once or twice a year you have to consult it. You won’t spend a lot of time reading it, but you’ll be glad you have it on hand when questions arise. And I try to add some humor so it’s not too boring for you!
It is available in paperback and Kindle format, so buy it on Amazon today! And don’t forget to leave a review if you do!
