SunTaxMan Posted January 28, 2009 Report Share Posted January 28, 2009 New client, Church minutes show Housing Allowance allocated as % of Pastor's wages, not a dollar amount. This is a new thought to me. Is it "acceptable" to be % of wages? Every suggestion for Church wording (that I have seen) for their minutes expresses HA as $, not %. btw, allocation done in advance - no problem with timing of Church action. Comments? Thanks, Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted January 28, 2009 Report Share Posted January 28, 2009 According to "Church & Clergy Tax Guide," the practice of declaring a percentage should be avoided as it bears no correlation to actual housing expenses. The problem arises when the pastor prepares the tax return as the exclusion from gross income is the smallest of the amount actually used to provide a home; the amount officially designated as a rental allowance; or the fair rental value of the home, etc. There is apparently no precise method of designating the allowance mentioned, though. It is prudent to have a designated allowance closely reflecting the actual expenses. Perhaps a percentage might, by chance, do that. It could be "a teachable moment" for the pastor and church. Quote Link to comment Share on other sites More sharing options...
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