Sunday, December 26, 2010

Ministers and Taxes

A recent post from Dec 20th by accountant of a minister in 2009 gives one pause. It really underlines the advantage a preacher gets. First he gets $105,000 in cash from his church. He also received a W-2 with wages of $40,000 and a housing allowance of $65,000. Ministers can elect out of social security and Medicare. He only has to recognize the portion of the housing allowance as income not spent on anything related to his house. He can deduct mortgage interest, principal, utilities, HOA fees, insurance, furniture, appliances, etc. Normal people can only deduct their interest and property taxes. Therefore he only had to recognize $9,000 of his housing allowance as income. Then he is able to deduct mortgage interest and taxes again from schedule A, ie. a double deduction. Then in the analysis of a normal taxes compared to the ministers of equal income the minister got to deduct only $740 and then got a refund of a few hundred dollars. The normal guy had to pay $18,826. This is grossly unfair and goes to show the extent being a clergy in this country gets financial breaks. And we thought they didn't get much to begin with. Now consider the mega church and media pastors like Benny Hinn. They make millions and all of it is tax free. It is a con!
Skeptical DoDo

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