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 .
* * * * *
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 .
38 SMG Solutions