pulpit supply allowable deductions?

in 2012 I was asked to be pulpit supply for a rural church, Sunday and mid-week services. I filled in about 10-12 weeks for this church while still working my regular full-time secular job. The "honorarium" I was given barely covered mileage to get to the church (about 45 miles paved roads or 33 miles dirt)the church just called mid-Jan 2013 for my SS# to issue a 1099. I have documented dates when I filled the pulpit, and wrote the miles driven for the services. What are the allowable deductions I can make/take and is the 1099 really needed if after mileage reimbursement the annual honorarium is less than $600

Comments for pulpit supply allowable deductions?

Click here to add your own comments

Account Reimbursements
by: Vickey

One last thing, account reimbursements are only tax exempt for employees. Even if you were "reimbursed" for your mileage...unless you were an employee of a church that had set up a proper accountable reimbursement policy...the amount would still be taxable income for you.

See this page on account reimbursements: https://www.freechurchaccounting.com/accountablereimbursementpolicy.html

Self-Employed Deductions
by: Vickey

The church would not have to issue you a 1099 IF the total amount paid to you for the tax year was under $600.

I not sure what you meant by: "is the 1099 really needed if after mileage reimbursement the annual honorarium is less than $600"

You would not deduct anything from the amount paid as far as determining if a 1099 should be issued.

You can deduct mileage from the honorarium amount on a Schedule C, but if your "business" does not show a profit, you cannot claim a health insurance deduction as an adjustment to income on Line 29...see this article: http://smallbusiness.foxbusiness.com/legal-hr/2012/02/10/how-to-calculate-health-insurance-deductions/#ixzz2IdVRw1n4

You would not be able to deduct housing. Housing expenses are not a tax deduction. You may be think of a housing allowance which is a tax exclusion; however, a housing allowance is a portion of a minister’s compensation that is so designated and board approved in advance by the minister’s employing church. See this page: https://www.freechurchaccounting.com/housingallowance.html

You can deduct any business expense that is "ordinary and necessary". In other words the expense must be necessary to carry on your business and ordinary or common for your business.

other deductions?
by: Anonymous

I know I have documented mileage, but is mileage the only allowable deduction? what about housing, self-pay health insurance, etc.?

by: Anonymous

If the church did not use an accountable method they would give you a 1099 or W-2.
You can claim the mileage on your 1040(or whatever form you use) to claim the deduction if you have records to support it.
You can go to IRS.gov for more information on this and in the future ask the church to use the accountable method for reimbursements.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Church Accounting FAQs.