11 acceptable housing expenses, 5 to avoid
Ministers are able to claim many housing expenses as exclusions for income tax purposes. If you’re gathering information for your tax return or to provide to a tax preparer, here are 11 exclusions you can take:
• Mortgage payments (interest and principal)
• Real estate taxes
• Property insurance
• Utilities (gas, water, electricity, sewer, garbage pickup, local telephone service)
• Appliances and furniture (purchase, rent and repairs)
• HOA dues
• Pest control
• Yard maintenance and improvements
• Maintenance items (household cleaners, light bulbs, etc.)
• Down-payment on a home
• Remodeling expenses
There are also some housing expenses that are denied. Avoid claiming these five:
• Cleaning service
• Food
• Domestic help
• Expenses on a second home or vacation home
• Home equity loan payments (unless used to pay for housing expenses such as remodeling)
Please remember your claimed housing allowance is the lesser of these actual expenses or the church-approved amount. Therefore, our recommendation is to estimate a little high for the amount you submit to, and what’s ultimately approved by, the church.