A housing allowance is not money paid to a pastor in place or in addition to a salary. Rather, it is a portion of the board-approved salary a minister is already receiving that is excluded from his or her taxable income.
If properly implemented, any minister can exclude home expenses from his or her income. These home expenses range from rent, property taxes, and principal and interest, to appliances, repairs, furniture, and much more, so long as those expenses provide the minister with a home.
Housing allowance benefits:
- Save thousands of dollars on taxes each year
- Exclude home expenses from income
- Banking and major buying purposes
- Self-employment tax reporting