clergy self-employment

[WITAXLADY]

I did a search and cannot find anything that addresses this...

So with the 2106 eliminated - that also means the mileage the ministers would take off there, books, etc against their SE earnings is also gone? Meaning the 55,000 miles etc creates an amount due of $2500 instead of a refund of $1,000?

Yikes?

Any work around? Am I missing something? (I have the earnings/allowance fine)

Mileage allowance would not help SE tax but would give them $$ for gas anyway

Thank you,

D

[Lion EA]

Going forward, suggest your client negotiate an accountable reimbursement plan with his church.

[WITAXLADY]

yes, I suggested that and lo and behold he did have some self employment income - he did not report! Imagine that - a clergy... and so some of his expenses went there...

Thank you - but that is not fair as the 2106 is linked in this case to the SE

wait did I say fair??

D

[Lion EA]

An accountable plan is very fair to everyone. Reimbursements are not income to your client. Reimbursements are deductible by his employer; although, in this case not needed by his employer.

[RitaB]

8 hours ago, WITAXLADY said:

I did a search and cannot find anything that addresses this...

So with the 2106 eliminated - that also means the mileage the ministers would take off there, books, etc against their SE earnings is also gone? Meaning the 55,000 miles etc creates an amount due of $2500 instead of a refund of $1,000?

Yikes?

Any work around? Am I missing something? (I have the earnings/allowance fine)

Mileage allowance would not help SE tax but would give them $$ for gas anyway

Thank you,

D

Clergy deduct business expenses as an adjustment to Line 2 of Sch SE, see the third column of page one of the Instructions:  https://www.irs.gov/pub/irs-pdf/i1040sse.pdf   If you use ATX, right click the line to go to a worksheet to explain.

I have to ask if there's an extra zero on the mileage.  55,000 miles is 150 miles a day for 365 days. 

[Max W]

5 hours ago, WITAXLADY said:

yes, I suggested that and lo and behold he did have some self employment income - he did not report! Imagine that - a clergy... and so some of his expenses went there...

Thank you - but that is not fair as the 2106 is linked in this case to the SE

wait did I say fair??

D

Gee! He didn't report his SE income.    Many years a go I worked for a tax officet that had about 60 clergy clients.  The owner said that the clergy were the biggest violators in unreporting income and also of overstating expenses.  Who  would'a thought.!     Guess they missed this in the Bible  "Proverbs 6:16-19: “These six things the Lord hates, yes, seven are an abomination to Him: A proud look, a lying tongue, ........."

[Medlin Software, Dennis]

I run across, almost daily, cases of "but we have always done it that way", so sometimes the issue could be unknowing beneficial ignorance.  Catch-22 (which I am actually rereading).  We may not be allowed or comfortable prying and sharing knowledge, and the needed information may not be shared on purpose or by ignorance.

In your cases, there are things your clients may not share.  In mine, it is things such as "I want to pay something to my employees pre tax", with push back when I ask for details on the "plan".