Statement Providing Details About Ministerial Income

by Kent
(Danville IL)

I am preparing my taxes with H&R Block tax software. I am ready to file and I am instructed to write a statement about ministerial income, housing allowance, and expenses with my return.

What should the body of the letter contain?

Does anyone have an example?

Statement Describing Housing Allowance

IRS Publication 517 says to include a statement describing my housing allowance and nondeductible expenses. Is this an actual form? Are there any good examples to follow?

vickey's reply

If you incur and claim unreimbursed ministry related expense, the tax code denies a tax deduction for part of the expenses of operating your ministry. The nondeductible amount is the portion of your expenses that is allocated to your tax-free house or parsonage allowance.

If you are affected by this deduction cutback, you'll have to attach a detailed statement to your tax return.

The statement must contain all of the following:

• A list of each item of taxable ministerial income by source (such as wages, salary, weddings, baptisms, etc.) plus the amount.
  
  
• A list of each item of tax-free ministerial income by source (parsonage allowance) plus the amount.
  
  
• A list of each item of otherwise deductible ministerial expenses plus the amount
  
  
• How you figured the nondeductible part of your otherwise deductible expenses.
  
  
• A statement that the other deductions claimed on your tax return are not allocable to your tax-free income.

Taken from and article on Turbo Taxes titled: Ministers and Taxes

Here is an example of the statement: Example Two: Retired Minister (last page)