FAQ: Can I stop my church from taxing me as a Minister?
When confronted with the additional self-employment tax burden that clergy face, many ministers ask the question “Can I just tell my church to tax me as a normal employee?” Unfortunately, whether you are taxed as a Minister is determined primarily by the functions of the position. IRS lists five criteria to determine if a position…
Clergy Moving Expenses Q&A
This Q&A has been developed to provide general information for churches and clergy who may have questions about the change in federal tax law concerning moving expense payments. Q: How does the new law change moving expense payments? A: The moving expense exclusion and the individual deduction were both eliminated for tax years 2018 through…
Can I still claim my dependent if they live at school and are on scholarship?
In order to claim someone as your dependent, there are five tests: relationship, age, residency, support and joint return. Most of these tests are pretty straightforward, but we get a very common question about residency: “If my dependent is away at college for nine months out of the year and gets a scholarship, can I…
Are student scholarships taxable?
If you or your dependent receives a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions: You or your dependent is a candidate for a degree at an educational institution that maintains…
I use a computer for ministry work and personal purposes, can I deduct it?
Many ministers purchase computers to use for their ministry work but also end up using them for home e-mails or other personal purposes. Are you able to deduct the purchase of a computer that is used both for work and for home? The answer is yes, a portion of it can be deductible. When deducting…
I received an adjustment notice from IRS
IRS is starting to issue adjustment letters on 1040 returns that were filed back in April. If you receive one of these notices, don’t panic. Instead, follow these simple steps to figure out what to do. Read the letter in full. It should explain what part of the return they are adjusting, whether it is…
FAQ: 1040 Extension Deadline
We are one month away from the extended deadline for 1040 filings. Here are answers to many of the frequently asked questions we receive this time of year. When is the filing deadline? The extended filing deadline for the 2019 1040 return is October 15th. Can I get an extension past October 15th? No,…
FAQ for Clergy: What is the estimated tax penalty?
A couple questions that CFR gets every tax season are “Why am I getting assessed an estimated tax penalty?” and “What is an estimated tax penalty?” The US has a “pay as you go” tax system. Instead of paying your taxes in a lump sum, the IRS expects payments throughout the year. Most W-2 wage…
Can I take out a home equity loan and use that as an expense for the housing allowance?
Answer: Yes, you can use a new home equity loan for your housing allowance, but with some restrictions. The Internal Revenue Service allows ministers to use home equity loans as a housing expense, but only if the loan is used for direct housing-related expenses (i.e. for maintenance or the purchase of a home). If you…
If I pay off my mortgage, how does that affect the housing allowance?
Ministers who live in the same home for a long time may reach the point where they are paying off their mortgage. At this point, many ministers wonder how not having a mortgage will affect their housing allowance. Fortunately, you can still qualify for the housing allowance if you have paid off your mortgage. However,…
