This is a guest post by Jon Neal, Executive Pastor of Hope Community Church in Minneapolis, MN. He has nothing to sell or promote, he just spent a lot of time researching this and thought he would share his efforts to be a blessing to you.  There is something very powerful in getting outside your normal context. Maybe you have an upcoming sabbatical. Or maybe you are looking for a place to take a quiet/planning retreat. Or maybe you're just looking for a place to take the family for a few days. There's just one problem - lots of those options cost a lot of money! While you could still scour Airbnb or VRBOs, there are many "off-market" properties available to pastors, some completely free of charge! The difficulty is that they often take a bit more effort than a simple Google search, so many rarely do it. However, these simple strategies ...

Tax season has just come to an end and most of us are either eagerly awaiting a return or bemoaning how much we had to pay. The rest of you filed an extension and are still trying to get your papers together or get your tax preparer to answer your calls. Isn't tax season fun? If you haven't opted out of Social Security, then you would have filed Schedule SE to calculate your Social Security and Medicare taxes, also called payroll taxes. Front and center, in the biggest, boldest print is the title for Schedule SE: Self-Employment Tax. But if you're a church employee and not self-employed, why are you filling out a form for self-employment taxes? Allow me to enlighten you. View post

A lot of people treat budgets like New Year’s resolutions. They are lofty and unrealistic goals with only an 8% chance of becoming reality. But that’s not how it’s supposed to be. Budgets are supposed to be personalized money management tools that help you take control of your finances. If you don’t have a greater sense of control and empowerment, then your budget isn’t working. If you don’t have the kind of budget I’m talking about, then you really need one. Follow this link to learn how to make a budget that serves as a GPS and not a jail cell. Once you’ve got your GPS budget going, here are a few simple ways to make budgeting easy and effective: View post

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 a major benefit for pastors with children. How The Clergy Housing Allowance Affects The Child Tax Credit One of the provisions of the tax reform that passed 5 or so years ago, one of the few points that everyone liked, was the doubling of the Child Tax Credit (CTC). Kids used to be worth $1,000 each and now they are worth $2,000. That still doesn’t feel like enough when your child is ...

The clergy housing allowance is by far the most common topic that I receive questions about. Here are 10 or the most common questions answered to help you get the most value out of your housing allowance: How does a housing allowance work? You, the pastor, calculate what your housing costs will be for the year and submit it to your church. Your church approves the housing allowance and does not include it as taxable income in box 1 of your W-2. You track your housing expenses throughout the year. Add any excess housing allowance to your taxable income on your tax return when you file. If you have not opted out of Social Security you need to include the housing allowance amount as income when calculating your self-employment taxes. What expenses can be included in the housing allowance? A housing allowance can cover: Down payment on a home purchase Mortgage principal ...

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 have ended up in tax court for disregarding them.  Your maximum allowed housing allowance is the least of: the amount actually used to provide or rent a home; the fair market rental value of the home (including furnishings, utilities, garage, etc.); the amount officially designated (in advance of payment) as a housing allowance; or an amount that represents reasonable pay for your ministerial services. How To Calculate Your Housing Allowance Limit Therefore, to figure out what size ...

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. Bret Willoughby, CPA Yahr Income Tax Vingroup Stewardship Services Foundation StartChurch Clergy Advantage Witmer Wood Tax Consultants Master Plan Tax Services Clergy Financial Resources Connie Buskhol, CPA  Keller & Owens Wooten CPA Leeanne Stilley, Senior Tax Specialist (H&R Block), leeannepstilley at gmail dot com CrossTribe Advisory For Missionaries: Wacek & Associates The only way to get on this list is to be referred by a client. If you are a tax preparer that wants to be on this list, have one of your clients reach out to me. Also, ...

Insurance is one of those things that no one gets excited about. It’s like brushing and flossing your teeth; the few people who are really into it make a career out of it and the rest of us just go along with it because it’s the adult thing to do. But no matter how you feel about it, insurance is important to protect you from financial ruin, just like good dental care can save you from gum disease.  Today we’re going to talk about homeowners insurance specifically. This is a must for anyone who owns a home. Even if you don’t have a mortgage company telling you to buy it, you need it. I’m telling you to buy it. All it takes is one broken pipe to sink your finances and I don’t want that to happen to you. You can even use your housing allowance to pay the premiums, which ...

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

There are 3 foundational things that you can start developing in your children from an early age that will help make college less of a burden on your budget. View post