Ministerial Giving

[Christian]

A minister for whom I have worked for a time brought me her list of amounts given back to her church during the course of 2022 in tithes and other cash gifts. She asked if these were not expenses of her ministry deductible against her social security tax. These are personal expenses deductible on Schedule A and deductible if along with other Schedule A deductions exceed the standard deduction. I can find no change that alters this but if anyone knows if this is incorrect please advise.

[Lee B]

Rather than giving money back to her church, she can pay less social security by reducing the amount she receives from her church.

[Lion EA]

https://www.clergyfinancial.com/are-mandatory-tithes-a-deductible-business-expense/

[Lion EA]

The IRS's Audit Techniques Guide states on page 14:
https://www.irs.gov/pub/irs-utl/ministers.pdf

"Ministers often pay a small annual renewal fee to maintain their credentials, which constitutes a
deductible expense.

However, ministers' contributions to the church are not deductible as business expenses. They may argue that they are expected to donate generously to the church as part of their employment. This is not sufficient to convert charitable contributions to business expenses.

The distinction is that charitable contributions are given to a qualifying organization
(such as a church) for the furtherance of its charitable activities. Dues, on the other hand, are
usually paid with the expectation that a financial benefit will result to the individual, as in a realtor's multi-list dues or an electrician's union dues.

A minister's salary and benefits are not likely to directly depend on the donations made to the church. They may still be deducted as contributions on Schedule A but may not be used as a business expense to reduce self employment tax."
 

[Slippery Pencil]

4 hours ago, cbslee said:

Rather than giving money back to her church, she can pay less social security by reducing the amount she receives from her church.

Her pension may be based on her gross salary.  Doing this will reduce her pension.

If she voluntarily decides to not take the salary budgeted, it's constructively received, thus taxable income and a Sch A deduction.  If her and the church agree that the church will reduce her salary and she is no longer expected to tithe, the irs will ignore this arrangement if audited.

 

[Christian]

I thank all who replied which confirm my understanding of the law.