Housing Allowance approval??

by Darlene
(North East, Md.)

Housing Allowance approved for $300.00 a week
1.What goes into minutes the dollar amount or breakdown of the expenses so check can be issued?
2. Is it effective right away?
3. Does Pastor have to submit to church a copy of the expenses each month to the church to be kept on file?

Thank You.
Darle

Comments for Housing Allowance approval??

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housing
by: Anonymous

A good IRS Publication to have on hand is 1828. remember also that the housing allowance has to be pre approved, so the date it is approved is the start date not before.

1.What goes into minutes the dollar amount or breakdown of the expenses so check can be issued?

A. Total for year broken down by month, this is so if the pastor requests an increase at a later date it is easier to increase in the records. (if increased the amount changes from the new date and not the past amounts)

2. Is it effective right away?

A. Effective from date of approval.

3. Does Pastor have to submit to church a copy of the expenses each month to the church to be kept on file.

A. No, that is between the pastor and IRS, be aware of costs in your area so you know if it is "reasonable" but keep in mind it is also for utilities and other items.

You also might want to look into IRS pub 15 series, pub 517 & pub 525
Housing Allowance
by: Marcusintexas

The best way to handle authorization of the housing allowance is to make a decision at the time the budget is approved for the upcoming year and include the total amount of the allowance for the year as a lump sum in the budget.

Then it can be paid out as an equal monthly "allowance" (1/12th of the annual budgeted amount) or it can be paid out as reimbursement of expenses submitted in writing by the pastor.

The church has no legal obligation to review the amount of housing allowance requested by the pastor or to question how the allowance is being spent by the pastor.

If the IRS has any questions about the appropriateness of the housing allowance or how it was being spent by the pastor, that will be a matter between the pastor and the IRS, and the church would not have to become involved.

The exception would be if the church knowingly paid the pastor an amount that at budget time the church knew or should have known was extremely out of line and could never be justified.

Should that happen the church "leadership" could be brought into the matter since aiding and abetting an understatement of taxable income could become a rather serious and potentially embarrassing issue.

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