claiming their unreimbursed business expenses as an itemized deduction on Form 1040 Schedule A. These business expenses are only deductible if and at the point they exceed 2 % of the minister’ s adjusted gross income( AGI). However, contractors( selfemployed ministers) can deduct their professional or business expenses on IRS Schedule C.
Now, if your eyes are rolling back in your head and you’ ve pretty much resolved that you don’ t want to deal with any of this, don’ t be intimidated by the designations, categories, qualifiers, and tax double talk. What’ s most important is being mindful of the seven tax breaks and ensuring that you consistently keep the appropriate records to justify the expenditures being reported. The wisest advice that I couple with all tax information, to avoid enabling a loophole to become a noose, is to work with a qualified tax professional who can effectively navigate these waters with your individual circumstances in mind.
It is important to note that, except for the housing allowance, these tax breaks are monitored throughout the year and claimed at year end. The housing allowance is the greatest of these benefits and requires proactivity. When we consider ourselves stewards of the resources that God has given, more often than not, the act of stewardship requires a degree of forethought regarding how those resources are handled; not just how they’ re reported. There are investment instruments, such as the Roth Self-Directed IRA, that enables those who take a proactive role in their financial planning to set aside monies for retirement while empowering them to invest those funds and realize tax-deferred gains. While instruments such as this is not specific to clergy, it advances the intent to effectively steward Godgiven resources; enabling them to be handled in a manner that not only consumes but allows for financial growth.
From the standpoint of a minister, the tax breaks are appreciated; however, it is within the substantiating efforts that the greater value is realized. It is the handling of resources with forethought and transparency that speaks to the integrity of our faith and willingness to be examined in the light of truth.
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Dr. M. Stanley Butler, D. Div., MPA, MBA, is an author, teacher, and conference speaker. Hailing from Cleveland, Ohio, his ministry and message has taken him to Asia, Africa, Europe and many cities across the United States. With a heart to challenge God’ s people onward toward Christian maturity and faith as a lifestyle, he has expounded upon topics that include The True Worshiper, Walking In God-Ordained Purpose, and Foundational Truths of the Christian Faith. Through his consulting practice, STEPS, Inc., Dr. Butler has aided Christian ministries and nonprofit organizations through fundraising efforts as well as establishing financial policy, board development, and implementation of best practices. Learn more at: www. mstanleybutler. com. Contact Dr. Butler at drbutler @ mstanleybutler. com or by calling 877.447.0900.
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