How to calculate when NOT to take a housing allowance?

by Kelly
(Orlando, FL)

I've heard a few experienced ministers and ordained ministry leaders say that there are times when it costs more in taxes to claim a housing allowance than to not use that benefit.

How can we compute the tax benefit vs. tax expense to determine whether to take a housing allowance? Cannot seem to get my head around this one...

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Housing Allowance Costs More in Taxes????
by: Vickey

I cannot think of a situation where it costs more in taxes for a minister with a housing allowance than being paid that same amount as taxable wages????

All clergy compensation is subject to the self employment tax (unless they have opted out of SS)...including a housing allowance; however, housing allowance payments are not subject to income taxes...so again...I cannot really wrap my head around that one either =(

However, I am not a tax professional, so I would advise each minister to consult their tax advisor on their own personal tax situation.

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