Unpaid pastor

by Tim

I am an unpaid pastor of a church in RI, but I do live in the church parsonage, rent free and bill free. Must I claim this on my taxes, and also am I allowed certain deductions, even though I am unpaid?

Comments for Unpaid pastor

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Jan 24, 2013
Tax on Parsonage
by: Vickey

You are not subject to income taxes on the use of the parsonage; however, the fair rental value of the parsonage plus utilities is added when figuring your self-employment tax.

You are responsible for determining the fair rental value of the parsonage. A simple way would be to determine what comparable houses rent for in the area. A realtor can sometimes provide this information.

You would report this amount on a Schedule SE when preparing your personal tax return.

Since there is no income and no income tax due...I do not believe there are any deductions you could take.

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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.

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