Six Major Tax Mistakes Ministers Make
- They take an automobile allowance.
- They fail to take full advantage of their housing allowance
- The opt out of Social Security for the wrong reasons
- They don’t keep a mileage log
- They don’t use a tax accountant or bookkeeper who understands ministry finance
- They fail to take a housing allowance from their retirement funds, such as a 401(k) or 403(b)
Some highlights from today’s Rainer Report:
- Ministers can’t legally receive an automobile allowance. You can claim automobile reimbursements for mileage, however.
- The minister’s housing allowance in non-reportable and non-taxable. Ministers should take advantage of this.
- Every minister should be keeping a mileage log for anything other than his/her commute to the church.
- If you’re in ministry, you need to have a tax accountant who understands ministry income taxes. It can save you a lot of money and headache.
NOTE: For those who have not opted out of Social Security, your income is taxable for self-employment taxes.