Housing allowance for major repairs

If a pastor has major repairs on their home, can most of their salary be designated as housing allowance. (They have water coming into their basement and the repair is going to be thousands of $$.)

Comments for Housing allowance for major repairs

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Housing Allownace NOT Reported on 1099
by: vickey

A housing allowance is not reported anywhere on a 1099 form.

See this post:

Housing allowance
by: Anonymous

Can houseing allowance go on a 1099 Misc?

Housing Allowance amortized
by: Anonymous

If a church planter is paid strictly on the support that they raise each month, their income fluctuates. They have been board approved for $15,000/year for Housing Allowance. I have entered that into the payroll as $1250.00/month. January they receive $850.00 in support so the entire payroll is designated as Housing Allowance. In February they receive a one time additional donation from a giver increasing their payroll amount to $1850.00. I designate the $1250 towards Housing Allowance and the remaining $600 towards taxable wages. The church planter believes that I should have designated an additional $400 towards Housing Allowance to make up the difference from January for a total of $1650.00 HA in February. Is this ok?

Amending Housing Allowance
by: Vickey

A church can amend the housing allowance at any time and increase the amount; however, as Anonymous MN pointed out..."the Housing Allowance can not be post dated to cover expense before date of your Board passing the resolution".

An example take from Dan Bubsy's book: 2014 Minister's Tax and Financial Guide: "The church sets the housing allowance at $1,000 per month on Jan 1st, but housing expense are averaging $1200 a month. On July 1st, the church approves an increase in the housing allowance to $1600 per month. Therefore, the housing allowance for the year totals $15,600 ($6000 for the first 6 months and $9,600 for the last 6 months). Actual expenses are $14,400 ($1200 for each month). The minister excludes $13,200 for federal income tax purposes: ($6000 for the first 6 months - limited by designation and $7200 for the last 6 months - limited by actual housing costs).

You can see from the above example, that "it is often best to over-designate your housing allowance by a reasonable amount, subject to the fair rental value limitation, to allow for unexpected housing expenses and increases in utility costs. Any excess housing allowance designated should be shown as income on line 7 of Form 1040." (taken from page 79 of Dan's book)

It's too late to cover the extra housing expense that has already occurred, but it may be something your church can fix for the future.

Housing allowance for major repairs
by: Anonymous MN

The amount or percentage of Housing Allowance must set by the Board and documented in the minutes before the expenses occur.

The Housing Allowance can not be post dated to cover expense before date of your Board passing the resolution.

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