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It's fairly typical of clergy in the US. They opt out of SS, and don't get a guaranteed income later. The housing allowance allows one to put money into a house and have assets later. Not to mention, cover business expenses, the way anyone else would do so.
This sounds like a personal financial decision. Although the factors leading clergy to make this decision may include the housing allowance, that does not in and of itself validate the housing allowance.
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Keep in mind, the housing allowance really just gives on a tax deduction off of the self-employment portion of the taxes.
No, they are unrelated. What is related is if a clergy member opts out of SS, they no longer have to pay FICA (commonly called social security) or SECA (commonly called self employment tax)
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He is considered a private contractor, and pays self-employment fees.
True, but you said he opted out of SS, so he no longer has to pay that.
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Just like any small business owner does. If you want to open a business and work out of your home, go for it. You can probably even get a deduction.
Yes, you can deduct that PORTION of the home that is used EXCLUSIVELY for business. Not the entire cost of the housing.
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Anyone can claim business expenses.
True. But not everyone can claim their entire housing expense as a business expense.
Because a home is an asset. It's one of the ONLY assets clergy might have come retirement age.
Thanks for backing up my point.
A home is a personal asset, which clergy get based upon tax free income because of the housing allowance,. Therefore it is in no way an offset to the fact that clergy don't have to pay FICA/SECA.
Because a home is an asset. It's one of the ONLY assets clergy might have come retirement age.
So how is he supposed to live? That seems like poor planning to be allowed not to pay the 15% tax everyone else has to and then end up not being able to support yourself.
So how is he supposed to live? That seems like poor planning to be allowed not to pay the 15% tax everyone else has to and then end up not being able to support yourself.
That's just the way it is. Pastors don't go into ministry for the money. I know my church is poor and we would not be able to give him a $10k/year raise to make up for it.
Call it what it is..this is an attack on Christianity, and it's what Dan Barker does. He's a cowardly little man that is bitter about the time he spent in religion.
That's just the way it is. Pastors don't go into ministry for the money. I know my church is poor and we would not be able to give him a $10k/year raise to make up for it.
Call it what it is..this is an attack on Christianity, and it's what Dan Barker does. He's a cowardly little man that is bitter about the time he spent in religion.
Asking someone to pay their share is an attack?
Edit: BTW 10000 is 15% of 70000. So basically this man makes 80000(earnings+tax incentive) which is far above what the majority of families live on. Along with all the other perks regular Americans are not entitled to and are paying for so we can have a protected class of individuals and corporations that don't pay their share and anyone that says "Hey, that ain't right" is some kind of evil tool of Satan. I call BS!
Last edited by L8Gr8Apost8; 10-12-2017 at 08:53 AM..
Edit: BTW 10000 is 15% of 70000. So basically this man makes 80000(earnings+tax incentive) which is far above what the majority of families live on. Along with all the other perks regular Americans are not entitled to and are paying for so we can have a protected class of individuals and corporations that don't pay their share and anyone that says "Hey, that ain't right" is some kind of evil tool of Satan. I call BS!
Actually, the 1st Amendment grants the freedom to worship. That is why churches don't pay taxes, and it's largely why a parsonage is not taxed. The church is exempt.
And no---our pastor doesn't make $80k. He makes $50k. So, the amount would be less. I hadn't done the math, so I just used a nice round #. Out of that $50k he has to raise a family, and buy a house that is to be used for ministry purposes, as well as pay all of his taxes, including self-employment tax.
Actually, the 1st Amendment grants the freedom to worship. That is why churches don't pay taxes, and it's largely why a parsonage is not taxed. The church is exempt.
We aren’t talking about the church directly, we are talking about clergy housing allowance. Related I agree, but they are distinct issues.
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And no---our pastor doesn't make $80k. He makes $50k.
How much your pastor makes isn’t technically relevant to the larger principle, but I will indulge you.
Is that $50k in total, which would be salary and housing included, or is it $50k for salary only?
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So, the amount would be less. I hadn't done the math, so I just used a nice round #. Out of that $50k he has to raise a family, and buy a house that is to be used for ministry purposes, as well as pay all of his taxes, including self-employment tax.
Lots of people have to raise a family on $50k. Irrelevant to the discussion
Lots of people have to buy a house, and many use their homes for business. Why should he be allowed the purchase of a house tax-free when most people aren’t? Why not simply deduct the portion of the house used for ministerial purposes, just like anybody else who operates a home business?
Everybody has to pay taxes out of their salary. I don’t understand why you note this as special for clergy
Why is he paying self employment tax? You said that he opted out of social security, which means he doesn’t have to pay self employment.
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