Monday, November 01, 2010

If Housing Was Free (NaBloPoMo entry)

How would your life change if you didn't have rent or a mortgage to pay, i.e., if your housing was free?

There are many people who think that since we live in a parsonage, my home is free. It's not. When a parsonage is part of the package, the salary is significantly less. The district guidelines calculates its value at 25% of salary. Basically, 25% of my husband's paycheck is automatically withdrawn before we are paid. So if my home were free, our household income would increase by 25%. That would be a nice raise.


Mrs. Reverend Doctor said...

Not only is a manse-parsonage not free but you have to pay taxes on it's fair value...

The Rebellious Pastor's Wife said...

Mrs. Rev. Doctor, all of that falls under the tax shelter of the Housing Allowance.

Ministers are to pay no taxes on anything associated with their housing, right down to supplying it with dish soap and internet coverage. The one tax assist that ministers get is that their home and all expenses regarding maintaining it are tax sheltered.

This includes any taxes associated with the value of the home. Even if it is a home owned by the pastor.

You might want to talk with an accountant that specializes in clergy taxes. There is a good one that is used nationwide by pastors here --

here is a link to what is allowed under the housing allowance exclusion list.

Many accountants do not understand the clergy tax. It is quite complicated. Since we have to pay IRS taxes as "employed" but have to pay social security as "self-employed" (meaning we get no breaks at all, and have to pay all 15% of Social Security), this is the only break we get, but it is a good one.

If that is what you have been doing, you may have a good deal of money coming back to you.

Untamed Shrew said...

If I didn't have so many church friends on facebook, I'd be posting this there. As much as I would love to retire and die here in this 100+ year-old farmhouse, I know it ain't gonna happen. So we have to be extra disciplined to save money so that when we need to buy a house, we can. I'm going to nudge my Rev. Dr. about a clergy-speicalist accountant.