Does a Church Need to Keep records on what the pastor purchased with his housing allowance?

by Anonymous

Our church has recently asked us for an itemized list of what we spend our housing allowance on. The reasoning is they may need this in case they are audited. I was under the impression that the pastors are required to prove what the housing allowance was spent on. Can the church legally ask us to share such personal information? The housing allowance that is given is $7500 is this considered too much so that they may question how it is spent? Thank you for your time.

Comments for Does a Church Need to Keep records on what the pastor purchased with his housing allowance?

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HA Estimate record keeping
by: Anonymous

Why does the church need your personal information of your current housing expenses when you may require more HA next year if you anticipate other expenses such as remodeling of bathrm, kitchen, or purchasing a refrig or stove or other appliance which wears out etc. The minister has to give an account to the IRS next year of his HA expenses and any HA which has not been used during that year would have to be reported to IRS as income. That is my understanding. Please comment if this is not correct. Thank you for your time.

Does a church need to keep records on what the pastor purchased with his housing allowance?
by: Church Council Member in NC

Pastors need to estimate what they anticipate will be needed for their housing allowance expense for the coming year. This can be submitted in the form of a housing expense worksheet that church administration can use as a basis for what is finally approved for the housing allowance. This should serve as the necessary accounting file data to backup what was actually approved as an allowance. The actual expense that is incurred may be between the pastor and the IRS.
If your housing allowance of $7500 is an extra cash payment from the church in addition to your salary, then why not document it in writing in some way? If the church spends $4,000 on phones, we file a copy of the phone bill to document that payment. Basic bookkeeping 101 requires a source document for every $.01 spent.
$7500 for housing seems very reasonable especially for the state of Maryland. The same question has been discussed in a rural church in NC recently where the housing allowance was $26,000, $15,000 of which was paid in cash. I hope you understand my point.

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