Six Major Tax Mistakes Ministers Make

Six Major Tax Mistakes Ministers Make

1. They take an automobile allowance.
2. They fail to take full advantage of their housing allowance
3. The opt out of Social Security for the wrong reasons
4. They don’t keep a mileage log
5. They don’t use a tax accountant or bookkeeper who understands ministry finance
6. 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.