We ordained clergy like our tax break, the minister's housing allowance, because it makes us feel so special, that, along with not paying some of our taxes. The housing allowance permits us to exclude some of our income from income tax. GuideStone explains it here.
The minister’s housing allowance is among the most important tax benefits available to ministers. Section 107 of the Internal Revenue Code allows “ministers of the gospel” to exclude some or all of their ministerial income—as designated by their church or church-related employer—as a housing allowance from income for federal income tax purposes.Not only that but when we take the housing allowance on a house we are buying and for which we have a mortgage, we get a double tax break by (1) being able to exclude income spent on housing (mortgage, repairs, furnishings, taxes, insurance etc) from W-2 wages, and (2) use interest expenses a second time if we itemize deductions. I know of no legitimate justification for this tax break, but then who said tax policy in this country had to be legitimate, sensible, or fair?
What a great country anyway!
Lest we become too proud the gummit insists that we pay Self Employment taxes on the amount of the housing allowance. Truth is, most SBC clergy pay far more in SECA taxes that income taxes.
Of all the issues raging in the SBC these days - Mohler on homosexuality, Great Commission Resurgence stuff, changes at NAMB, the runup to the 2012 election - what really counts for the bank accounts of SBC pastors and clergy might get lost.
Plodder is happy to keep the brethren/sistren informed.