November 05, 2011

Minister as a Volunteer--No Housing Allowance Benefit

Question:

A pastor works a full time job and thus does not take a salary from the church. Since he owns his own home, can he take a tax deduction for housing allowance and travel expenses from his ministry even though his income is actually from another job?

Answer:

Unfortunately, a housing allowance is only based on a designation of compensation paid by the church. No housing allowance is permitted in his case. Essentially, the minister is a volunteer. This does mean that his mileage on behalf of the church is deductible as an itemized deduction (at the charitable rate) and his out-of-pocket costs as a volunteer may be written off (Schedule A).

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