Pastor acquires more business expenses than his salary

by Danielle
(Pennsylvania)

We pay our assistant pastor $500/month, but he often acquires more than that for business expenses related to the church. We have an accountable reimbursement policy in place for the pastor and would like to set one up for the assistant pastor as well. Can we set his allowable expenses equal to or more than his salary, and if so, how do I fill out the W-2? By the way, he has a full-time job elsewhere also.

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Mar 04, 2014
more business expenses than salary??
by: Lewis in NC

This would be handled for the assistant pastor the same as for the pastor. However, you cannot show negative earnings on the W-2 form for the assistant pastor or anyone for that matter. Any excess business expenses that the assistant pastor has could be placed on his 1040 tax form, Sch. A as a possibility. You need to read the relevant tabs to the left, "Reimbursement Policy" for example.

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