Record keeping requirement for the church on minister housing allowance

by Maggie H
(Los Angeles, CA USA)

What details are required for the church to keep as ministers' housing allowances?

What are the required details or evidence that the church needs to keep?

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Comments for Record keeping requirement for the church on minister housing allowance

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Documenting Housing Expenses
by: Marcusintexas

So, if I am understanding this correctly, if the pastor provides a total figure for his housing allowance, say $12,000 per year, and if the elected stewardship/finance committee of the church placed that amount in the operating budget when the budget was approved prior to 12-31-2012 for the year 2013, THEN it is not the responsibility of the church treasurer or the stewardship/finance committee to document the pastor's housing expenses. It is the pastor's sole responsibility to keep those personal financial records and be prepared to defend those records should an IRS auditor come knocking on the parsonage door. AM I CORRECT HERE?

Also, if the annual budget is $12,000 can the treasurer simply include $1,000 per month in the pastors check with that amount being shown as the monthly Housing Allowance with no requirement for the pastor to turn in a list of housing expenses each month? ANY HELP WILL BE APPRECIATED!!!!!
Clergy determine housing allowance amount
by: Anonymous

It is not the church but the clergyperson who determines what the housing allowance will be, but the amount must be recorded by the council, etc., before the beginning of the calendar year.

The church has no responsibility for the amount or reporting of the allowance; the pastor must keep track of all expenses related to housing. Valid expenses that do not exceed the amount recorded by the council can be deducted from taxable income on the pastor's tax return. That number will be added back (on the same tax return) to compute Social Security and Medicare liability. A pastor pays the full "employee" portion AND the "employer" portion--twice what most people pay. Some churches also pay the "employer" portion to the pastor, but it is paid and reported as regular income (the pastor pays all taxes on the additional amount).

I once had a personnel review committee say that they were "approving" my increased housing allowance (because my family was buying a new house) and, further, that I would not receive a raise because I was getting an "increase in income" because of a larger tax break. That did not stand, but it was an uncomfortable time to educating laity.

1. The pastor names the amount (because he or she has a realistic idea of what expenses will be). 2. The council records the amount in official documents. 3. The pastor justifies every expense and reports the amount that was spent on housing (not necessarily the amount that was designated) to the IRS in the process of filing the yearly tax return.
Church Records for a Housing Allowance
by: Vickey

The records the church is required to keep on file is the written resolution approving and designating the housing allowance and any changes or modifications made to the housing allowance.

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