Housing Allowance Benefits
With a housing allowance in place, a ministers board of directors can approve up to 100% of his or her salary under a non-taxable status on the pastor’s income taxes. Having a housing allowance also can cover home expenses that range from rent and property taxes to appliances and furniture, home improvements, and much more. As long as your home expenses provide you with a home, they are qualified housing expenses.
A housing allowance is not money paid to a pastor in place or in addition to salary. Rather, it is a portion of the board-approved salary a ministry is already receiving that is excluded from his or her taxable income.
If properly implemented, any minister can exclude home expenses from his or her income. These home expenses range from rent, property taxes, and principle and interest, to appliances, repairs, furniture, and much much more, so long as those expenses provide the minister with a home.
Housing Allowance Benefits:
Save thousands of dollars on taxes each year
Exclude home expenses from income
Banking and major buying purposes
Self-employment tax reporting