14 Nov Tips for Pastors to Consider When 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 directly, Moving Expenses are not deductible (except for active duty military relocation). This also means that any money the Church gives you to pay for moving will be taxable. If it is negotiable, you may want to consider having the Church pay a little more to cover both the moving expenses and the taxes that result from the additional income.
Designate Your Housing Allowance
One of the biggest tax benefits currently available to Clergy is the Housing Allowance. However, you must have the Church designate the allowance in writing in order to take advantage of it. Since you have not worked in your new location before, you will have to have the Church board (or whoever is in charge of the finances) approve your Housing Allowance in the budget and/or meeting minutes.
Ask How Professional Expenses are Paid
If you have to pay ministry-related expenses, will you have to pay out of pocket? Does the Church reimburse you? If the Church pays you a flat amount for professional expenses regardless of how much you spend, then that money has to be included as taxable income on your tax return. If the Church requires you to submit reports and only pays you for what was purchased, then that is considered an “Accountable Plan” and neither the income nor the expenses are reported on your taxes. Generally speaking, Accountable Plans are more beneficial.
Ask How Automobile Expenses are Paid
The same questions apply to auto expenses. If the Church pays you a flat amount for automobile expenses regardless of the distance travelled, then that money has to be included as taxable income on your tax return. If the Church requires you to submit mileage reports and only pays for the distance you travel, then that is considered an “Accountable Plan” and neither the income nor the expenses are reported on your taxes.
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