Discussion:Pastorial expesnes
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Discussion Forum Index --> Basic Tax Questions --> Pastorial expesnes
Discussion Forum Index --> Tax Questions --> Pastorial expesnes
Tsaccounting (talk|edits) said: | 16 January 2009 |
| I have a business Sole prop client who also is a pastor. He has pastorial expesnes that he pays from the his business (i.e meals). Would he be allowed to deduct these expenses from his personal taxes. IF yes, under what category and what kind of records are required? | |
| 16 January 2009 | |
| I believe there is an IRS Pub for Tax Issues of Clergy, but I know that JR1 has commented on several threads that are searchable
| |
| 16 January 2009 | |
| basically, you have to allocate between employee business expense, sch C expense, and allocable to his tax-exempt housing allowance | |
| January 16, 2009 | |
| Yeah, I have to sound like Kevin here in saying that clergy taxes isn't something to just take on without some training and experience. Grab a Worth's Income Tax Guide for Ministers or Epstein's ClergyTax. Both are excellent and easy to read for pros. | |
Tsaccounting (talk|edits) said: | 16 January 2009 |
| My client is an ordained pastor who is in charge of the seniors in his Church and is their Sunday School teacher. My questions is: Every months the Pastor pays for meals. If the Pastor received a salary, I know he would be able to deduct this at 50% as M & E, but what about this Pastor who has to write off his charitable expenses on Sch A? Would you take 50% of the bill off on Sch A? | |
| January 16, 2009 | |
| If you believe that they qualify as charitable, you'd write off the full amount. Sounds like they might. | |
Tsaccounting (talk|edits) said: | 17 January 2009 |
| I do not know why the church does not reimburse. However, can this be taken as charitable contributions on Sch A? | |
| 17 January 2009 | |
| just because a minister pays for the meal doesn't mean the person eating the meal is a 503(c) (or other) charity | |
Tsaccounting (talk|edits) said: | 17 January 2009 |
| So is the client entitled to any tax break for these expenses? | |
| January 17, 2009 | |
| Expenses incurred in performing official duties are considered charitable contributions. So if that applies.... | |
| 17 January 2009 | |
| thank you, JR1. I'll concede to your expertise in this area. | |
Tsaccounting (talk|edits) said: | 17 January 2009 |
| So my clients expenses are related to pastorial duties and i want to confirm that it is ok to take them as charitable contributions on sch A.
Thanks | |
| 17 January 2009 | |
| wow, look what I found by using the yellow search box: | |
| 17 January 2009 | |
| No, this cannot be deducted as a charitable contribution. See Reg ยง 1.170A-1(c)(5). | |
| January 17, 2009 | |
| Oh, I hate this. Disagreeing with Riley never goes well with me, but some explanation of that section: A voluntary payment made without expectation of economic or other benefit is deductible as a charitable contribution, subject to the percentage limitations and other restrictions applicable to charitable contributions. In contrast, a transfer which bears a direct relationship to the taxpayer's business and which is made with a reasonable expectation of a commensurate financial return may be allowed as a trade or business expense if the requirements for that deduction are satisfied.
So the questions remains, would his expenses qualify? I don't know, I merely suggest that they might. When we function in an official capacity on behalf of a charity and incur expenses, those are considered charitable contributions. The fly in this ointment is that the pastor has a business relationship as well, so the hinge seems to be whether he expects some economic benefit either now or later. If not, it seems to be deductible as charitable. But Riley's been right much more than me, so we'll see where this goes. | |
| 17 January 2009 | |
| http://www.landoverbaptist.org/ Let me warn you, this Church is about as "old-timey" as you can get, but when I last looked at it three or four years ago, they had some good stuff on finance. | |
| 17 January 2009 | |
| JR1, if a teacher buys school supplies for his or her classroom, is this a charitable gift or an employee business expense? The answer is: What would you like it to be? If the teacher is under the 2% limit, you would probably perfer to call it a gift. | |
| January 17, 2009 | |
| Yeah, I know. I struggle with this with my wife, who works at our church...fortunately, she gets reimbursed for pert near everything. When she didn't work there, it was easy--charitable. When she started getting a paycheck, even tho' many things didn't change, suddenly it's supposed to be work expense? For the pastor, tho', as dual status, I dunno...maybe he can't call it charitable either. | |
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