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Pastor/minister deduction - living expenses

Forum|Forum|7 years ago
June 6, 2019
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I live in a house that I own and my church did not set up a "housing allowance." Essentially I am getting a 1099 with the entire compensation in box 7. Can I deduct (on schedule C or elsewhere) things like property tax, utilities, home repairs, and even other living expenses, etc?

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Best answer by RichardG

Unfortunately, the IRS requires "The minister's employing organization must officially designate the allowance as a housing allowance before paying it to the minister." Unless your church designated part of your payment as a housing allowance, you are not entitled to those deductions. You can still deduct your property taxes and mortgage interest on Schedule A.

R

RichardGAnswer

Employee

Unfortunately, the IRS requires "The minister's employing organization must officially designate the allowance as a housing allowance before paying it to the minister." Unless your church designated part of your payment as a housing allowance, you are not entitled to those deductions. You can still deduct your property taxes and mortgage interest on Schedule A.

O

Opus 17

Employee

It costs the church nothing to do this. So why won't they?
<a rel="nofollow" target="_blank" href="http://www.ecfa.org/PDF/2016-Preparing-Tax-Returns-For-Clergy.pdf">http://www.ecfa.org/PDF/2016-Preparing-Tax-Returns-For-Clergy.pdf</a>

However, you probably should not be getting a 1099-MISC. Even though pastors are considered self-employed for some income tax purposes, if you answer to the congregation (directly or through a board) or to a denomination (district, etc) then you are a common law employee and should get a W-2 with your wages in box 1 and boxes 2-6 blank. The church should be filing form W-3 and form 941 or 944, not giving you a 1099. Your treasurer or finance committee may need some education, your denomination may have resources.