Questions About Housing Allowance

by Joe
(Los Angeles)

We have questions about how to handle housing allowance.

My wife and I are ministers being paid by a 501c3 and we have income from other sources than ministry. If we receive the Housing Allowance to pay mortgage, utilities, etc. on our home can we continue to write off the mortgage interest? If we can't do both which way is best?

Prior to my wife and I being employed as ministers by a 501c3 corporation we were a sole proprietorship that counseled people in our home. In doing our taxes we counted one third of the space for business (counseling,) one third for our living space and one third for rental space.

We have 4 tenants living in our home who pay us rent. Would we be able to have the Housing Allowance cover the entire mortgage and utilities or only two thirds? I have an online home business with my son not related to the non-profit and does not take up much space.

Should our tenants continue to pay rent to us or to the non-profit or should they pay their rent as a donation to the non-profit that they can write off as a donation.

The deed and mortgage is in the name of my wife, my son and me. We cannot change the deed without risking the lender calling the loan.

We are new at this and I hope this is not too confusing.

Thank you for all your help! I am very glad I stumbled on your site.

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Join in and write your own page! It's easy to do. How? Simply click here to return to Designating Housing Allowance.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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