Church and Clergy Tax Matters
Over half of our payroll work is done for churches. Since we understand the complexity and unusual procedures involved in clergy tax preparation, churches throughout Pennsylvania as well as other states rely on us for their payroll needs. We also provide financial reviews for churches and evaluate church procedures and policies for the collection, handling and disbursement of funds. Seminars and workshops are available to churches and we stand ready to assist in the design of clergy compensation packages. Our services are generally available regardless of location – we have clients on five continents and in 30 states – thanks to modern technology and the internet.
Ken Shirk is nationally recognized for his expertise in clergy tax help and has clergy clients on 5 continents and in 30 states.
WARNING! Be very careful in selecting a tax professional if you are a member of the clergy. This is a very specialized field and what your preparer doesn’t know CAN HURT YOU! Three questions can sort the chaff from the grain in this area. Anyone who cannot answer these three questions clearly and without hesitation is not adequately prepared to be entrusted with filing a clergy tax return. Here are those crucial three questions:
- What is meant by the “DUAL TAX STATUS OF CLERGY”?
- How does the DEASON RULING affect my deduction of expenses?
- How does the FAIR RENTAL VALUE of my home affect my HOUSING EXCLUSION?
Preparation for Clergy Tax Appointment
Due to the large number of clients we serve during the 12 weeks of tax season, it is imperative that you come to your clergy tax preparation appointment well prepared. In order to accommodate all our clients prior to April 15, we find it necessary in most situations to limit our interview time to approximately 1 hour. We want to make the best use of that time and you can help by having the following information readily available to us:
- See above list
- Number of honoraria from weddings, funerals, speaking, etc.
- A detailed list of unreimbursed ministerial expenses, such as travel, gifts, conferences, ministry mileage, etc.
- A detailed list of your housing expenses, using the clergy worksheet as a guide.
- Please have any mortgage or home equity statements available.
- If you purchased, sold, or refinanced a home in the past year, we need to see a copy of the settlement papers. (HUD1)
- If you paid TUITION for post-high school education for yourself, your spouse or a dependent, we will need to know how much was paid out of your funds (excluding grants and scholarships) and when the payments were made and which semester the costs were for. We also need to know what year (freshman, junior, etc.) the student was considered to be in at the time the expenses were incurred.
- If your situation in the past year is similar to the prior year, a review of your prior year return would be a good way to prepare for your tax appointment. Please come prepared with dates of birth and Social Security cards (or photocopies) for each person listed on your return. Without Social Security cards (or copies) we may not be able to file the return electronically for you.