This blog posts answers to questions given to us by ministers and others serving in Christian ministries advancing the gospel of Jesus Christ. It also discusses other financial topics that those in gospel ministries face. We trust the information provided can be helpful to you.
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Special Topic: A Great Cloud of Witnesses, Introduction to the Series
The writer of the book of Hebrews followed his Hall of Faith chapter with these words:
Wherefore seeing we also are compassed about with so great a cloud of witnesses, let us lay aside every weight, and the sin which doth so easily beset us, and let us run with patience the race that is set before us, Looking unto Jesus the author and finisher of our faith; who for the joy that was set before him endured the cross, despising the shame, and is set down at the right hand of the throne of God (Hebrews 12.1-2).
Like the first Century Christians, we have our own modern day GreatCloud of Witnesses. They are the men and women upon whose devotion we stand. As 21st Century Christians, these witnesses strengthen and encourage usto fully submit to God’s work in our lives and to respond to the eternal motivation He has placed before us—eternal life with our Heavenly Father in gratitude for the simple uses He made of our earthly days.
Authors of Christian biographies give us a rich trove of enlightenment into the lives of sinners redeemed by the grace of God. God empowered them to live exemplary lives that impacted not only their own generations, but those of countless others to follow. This series of relatively brief summaries seeks to share their stories and to motivate its readers to read and absorb the full pictures painted by the witnesses’ biographers. To begin your journey with us into "the Cloud" click on the Label to the right Cloud of Witnesses.
If a minister rents his principal residence, but he performs services (mowing the lawn, repairing the roof, etc.) in lieu of rent, can he still qualify the rent amount for a housing allowance tax benefit?
Of course, bartering income is taxable. The Internal Revenue Code interprets that above situation as follows: tenant/minister receives taxable income for the fair market value of the services he provides, andtenant/minster pays landlord for renal of residence.
The minister in this case reports taxable income for services provided in lieu of rent. It is also likely subject to self-employment tax. He may then claim as qualifying housing allowance expense equal to the amount he "pays" for rent of his personal residence. Essentially, there is no difference than if the minister and his landlord simply traded checks.
A church group went on a two-week mission trip, and a few of the members stayed an additional two weeks for personal time. Will the members who stayed the two additional weeks be able to deduct expenses from the trip?
IRS Pub 526 covers the
topic of Charitable Contributions and, more specifically, travel expenses
associated with charitable trips. The
publication states that travel expenses will be deductible “if there is no significant element
of personal pleasure, recreation, or vacation in the travel.” The publication
also states, “The deduction for travel expenses won't be denied simply because
you enjoy providing services to the charitable organization. Even if you enjoy
the trip, you can take a charitable contribution deduction for your travel
expenses if you are on duty in a genuine and substantial sense throughout the
trip. However, if you have only nominal duties, or if for significant parts of
the trip you don't have any duties, you can't deduct you…
403(b) contributions and the subsequent match be based on the pastor's total
income from the church (including housing allowance) or just from the salary minus
to Richard R. Hammar, J.D., LL.M., CPA, in his book 2015 Church & Clergy Tax Guide, “Section 107 of the tax code
specifies that a minister’s housing allowance (or the annual rental value of a parsonage)
is not included in the minister’s
gross income for income tax reporting purposes. Therefore, it would appear that
the definition of includible compensation for purposes of computing the limit
on annual additions to a 403(b) plan would not
include the portion of a minister’s housing allowance that is excludable from