Housing Allowance Clients and Pension Housing Clients ONLY,
Attached is our annual email guide for church workers. Please use the updated spreadsheet when possible. You may email/bring the completed spreadsheet to your tax preparer when it’s time to file. The rest of the information should be similar to last year.
Keep all of your bills and receipts in a tax folder…call it 2021 Housing Expenses. Your tax preparer does not need to see these receipts (that’s what the spreadsheet is for). Hold onto them in case the IRS asks for further documentation.
Housing Allowance Spreadsheet
We suggest you track all of your housing expenses in four categories. Please use the Excel spreadsheet attached if you’re comfortable doing so. The categories are Mortgage/Rent, Housing Items, Utilities, Phone/Internet.
Or as I like to say it, the few items NOT allowed for housing are:
- Health and Beauty
- Entertainment / Travel
Enter checks, cash, and credit card transactions. Credit cards are considered same as cash for tax purposes, no matter when you actually pay off the card. So a credit card swipe for furniture bought on December 31st counts in the current tax year, even though the bill won’t be paid until January.
Employed Church Workers – Housing %
As a reminder, you should be claiming at least 75% housing allowance with the school/church that hired you. Most schools/churches have a default of 50% (NOTE: Parsonage clients ignore housing % as this does not apply to you).
Retired Church Workers – Housing and QCD
As a reminder, a housing percentage is not applicable to you. As a further reminder, if you are age 72 or older and hold any Traditional IRA funds you should be doing ALL of your charitable giving through the Traditional IRA FIRST AND FOREMOST until you have met your giving goals for the year or the IRA balance is $0. Do not write checks, but rather donate directly from the IRA. See your advisor for details.
This item was removed under current tax law. Will be applicable again in the year 2026.
- Change housing allowance to at least 75% (parsonage ignore)
- Track housing expenses
o Save housing receipts and bills in a tax folder (save for 7 years)
o Use spreadsheet to provide to your tax preparer (or similar document if you prefer your own method)
- Over 70 ½ all donations from Traditional IRA
- Ask questions anytime
If you have follow-up questions, please let us know.