Moving Ministries?
A new Call can be exciting, but the logistics of moving and setting up in a new location can stressful, even before thinking about your taxes. Here are a few things to consider when moving to a new location. Moving Expenses are not deductible Regardless of whether your Ministry pays you or pays the movers…
Home Ownership Deductions Limited for Itemized Returns in 2018
For those who continue to itemize their deductions, the Tax Cuts and Jobs Act (or TCJA) has installed several limits on deductions for home owners. First, taxpayers can only deduct mortgage interest resulting from up to $750,000 of debt ($375,000 for those filing single or married filing separately). IRS Publication 936 summarizes the limitations (https://www.irs.gov/publications/p936#en_US_2018_publink1000229991),…
Miscellaneous Itemized Expense Deductions Cut in 2018
The Tax Cuts and Jobs Act is changing a lot this year, for better and for worse. One of the bigger changes to 1040 returns is the loss of miscellaneous itemized expenses on Schedule A. What sort of things are included in miscellaneous itemized expenses? Here are some examples: Tax preparation fees Investment fees Safety…
IRS Releases 2019 Standard Mileage Rates
The Internal Revenue Service (IRS) released the 2019 standard mileage rates. Beginning January 1, 2019, the standard mileage rates for the use of a car (vans, pickups or panel trucks) will be: 58 cents per mile for ministry or business miles driven, up from 54.5 cents for 2018 20 cents per mile driven for medical, up from…
Clergy Housing Lands in Seventh Circuit
Churches and the IRS joined forces Wednesday before a sympathetic Seventh Circuit panel to argue that a 65-year-old income tax housing exemption for clergy members does not violate the Constitution’s Equal Protection Clause. “The court has to take history into account,” said attorney Luke Goodrich of the nonprofit law firm Becket, a public-interest firm representing…
New Changes to the Employee Business Expense Deduction
Prior to the Tax Cuts and Jobs Act, which went into effect, January 1, 2018, unreimbursed ministry-related expenses were generally deductible on the minister’s individual tax return as a miscellaneous itemized deduction (Schedule A) if they exceeded 2% of an individual’s AGI. Starting in 2018, these deductions will be eliminated for tax years through 2025. This includes unreimbursed…
IRS Increases Annual Gifts Tax Exclusion
For starters, you can give gifts valued up to the annual gift tax exclusion amount each year without ever touching the lifetime exemption. For 2017, the exclusion was $14,000 per recipient. In 2018, it increased to $15,000 per recipient. The federal gift tax applies to the giver of a gift, not the recipient, for amounts…
Does your Church Want to Pay Tax on Employer Parking?
Churches and other historically tax-exempt organizations may need to file federal and likely state income tax returns according to a recently unearthed provision in the newly instituted Tax Cuts and Jobs Act that applies the federal income tax to parking benefits. Hundreds of organizations are now calling for its repeal. Section 512(a) (7) addresses this new…
2018 Brings Change to 529 College Savings Plans
The Tax Cuts and Jobs Act, which was signed into law in December 2017, allows families to use 529 plans to pay for up to $10,000 in tuition expenses at elementary or secondary public, private or parochial schools. The changes became effective January 1, 2018. 529 plans offer tax-free earnings growth and tax-free withdrawals when the…
Giving Strategies to Charity Under New Tax Law
Changes to the tax law in 2018 have taken away most people’s ability to deduct charitable contributions. But there are still a few options to consider in order to give and still receive. Fortunately, there are options for donors who would like to obtain a tax benefit for their generosity. One permits anyone 70½ or…
