United Methodist Church, ______________________



Church: FORMTEXT ?????Church Conference/ Church Council Date: FORMTEXT ?????Pastor: FORMTEXT ?????11049050482500Housing Exclusion/Housing Allowance Designation FormFor use at Church Conference or Council if pastor designates housing exclusionor church provides housing allowance. Keep copies for pastor and church records.See page 2 for determining which resolution to use. Worksheets and resources are on pages 3 and 4.Use the “Tab” key to navigate to next field or “Shift-Tab” keys to go to the previous field. Resolution 1: DESIGNATION OF HOUSING EXCLUSION(For pastors living in a parsonage provided as part of compensation or pastors who receive no housing benefits.)Whereas Section 107 of the Internal Revenue Service Code permits an ordained minister of the gospel to exclude from gross income “the rental value of a home furnished as part of compensation or the rental allowance paid as part of compensation, to the extent used to rent or provide a home”; and(a) Whereas Rev./Pastor FORMTEXT ?????is compensated by the FORMTEXT ?????United Methodist Church exclusively for services as a minister of the gospel,Therefore, it is hereby resolved that of the total compensation paid toRev./Pastor FORMTEXT ?????for calendar year FORMTEXT ?????, $ FORMTEXT ?????is herebydesignated as the housing exclusion pursuant to Section 107 of the Internal Revenue Service Code.(b) Whereas the FORMTEXT ?????United Methodist Church owns the parsonage; it is hereby also resolved that the minister shall have the rent-free use of the home located at: FORMTEXT ?????for the year FORMTEXT ?????and for everyyear thereafter as long as he/she is minister of the FORMTEXT ?????United Methodist Church.Resolution 2: DESIGNATION OF HOUSING ALLOWANCE (For pastors paid an allowance to cover housing expenses. No parsonage provided..)Whereas Section 107 of the Internal Revenue Service Code permits an ordained minister of the gospel to exclude from gross income “the rental value of a home furnished as part of compensation or the rental allowance paid as part of compensation, to the extent used to rent or provide a home”; andWhereas Rev./Pastor FORMTEXT ?????is compensated by the FORMTEXT ?????United Methodist Church exclusively for services as a minister of the gospel; andWhereas the FORMTEXT ?????United Methodist Church does not provide Rev./Pastor FORMTEXT ?????with a parsonage;Therefore, it is hereby resolved, that of the total compensation paid toRev./Pastor FORMTEXT ?????for calendar year FORMTEXT ?????, $ FORMTEXT ?????is herebydesignated as the housing allowance pursuant to Section 107 of the Internal Revenue Service Code; and it isfurther resolved, that the designation of $ FORMTEXT ????? as a housing allowance shall apply to calendar year FORMTEXT ????? and all future years unless otherwise provided for.Housing Allowance and Housing Exclusion InformationIs the pastor living in a parsonage provided by this congregation?YesNo No Use Resolution 1(a) & (b) and worksheet on page 3Use Resolution 2and worksheet on page 4Use Resolution 1(a)and worksheet on page 4Housing ExclusionHousing AllowanceHousing ExclusionA Housing Exclusion (IRC §107) is an amount that the pastor can elect out of the salary to cover housing expenses not paid for by the church. This is not included in taxable income on the W-2.A Housing Allowance is an amount paid to a pastor in addition to the salary to cover housing expenses. The pastor will need to designate a housing allowance in order for any or all of it to be excluded from the taxable income on the W-2. A Housing Exclusion (IRC §107) is an amount that the pastor can elect out of the salary to cover housing expenses, including expenses that a Housing Allowance does not cover if there is one. This is not included in taxable income on the W-2.Pastors are responsible for proving how much is actually spent on housing expenses as defined by the IRS. If they don't have receipts for the whole amount then the pastor is required to add the amount not used to taxable income for Federal and State income tax purposes. (The church does not add the unspent amount to the W-2.)Pastors are responsible for proving how much is actually spent on housing expenses as defined by the IRS. If they don't have receipts for the whole amount then the pastor is required to add the amount not used to taxable income for Federal and State income tax purposes. (The church does not add the unspent amount to the W-2.)Pastors are responsible for proving how much is actually spent on housing expenses as defined by the IRS. If they don't have receipts for the whole amount then the pastor is required to add the amount not used to taxable income for Federal and State income tax purposes. (The church does not add the unspent amount to the W-2.)If pastors have proof of spending the whole amount on housing expenses as defined by the IRS, the Housing Exclusion is not subject to Federal or State income taxes.If pastors have proof of spending the whole amount on housing expenses as defined by the IRS, the Housing Allowance is not subject to Federal or State income taxes.If pastors have proof of spending the whole amount on housing expenses as defined by the IRS, the Housing Exclusion is not subject to Federal or State income taxes.The full amount of the Housing Exclusion is subject to the Self-Employment tax.The full amount of a Housing Allowance is subject to the Self-Employment tax.The full amount of the Housing Exclusion is subject to the Self-Employment tax.The full amount of the FRV (full rental value) of the parsonage is subject to the Self-Employment tax.There are different rules for retired pastors serving a church. A retired pastor should designate all of the salary as a Housing Exclusion. Thus, if the pastor does not spend the entire amount, the unspent amount is subject to Federal and State income taxes only. The unspent amount is not subject to the Self-Employment tax.Use this worksheet if the church provides a parsonage as part of pastoral compensation.The IRS has specifically excluded the following from the costs “to provide a home”the cost of foodthe cost for domestic help (this probably excludes clothing as well)“To provide a home”, i.e. dwelling place and related structures (e.g. garage, etc.)Insurance: tenant’s/renter’s insurance – fire, theft, accident liabilityRepairs & maintenance not paid by the church: to the home, appliances, lawn equipment, TV; light bulbs, cleaning supplies like brooms, cleanersFurniture and appliances (TV, computers, etc.)Decorating accessories not paid by the church: linens, carpets, drapes, pictures & paintings, lamps, etc.Utilities not paid by the church: garbage removal, cable TV, telephoneMiscellaneous not paid by the church: lawn care, tools, plants, snow removalMINISTER’S ESTIMATE OF EXPENSESItem:Amount:Insurance (tenants’/renters’ on contents) FORMTEXT ?????Repairs & maintenance (not paid by church) FORMTEXT ?????Furnishings FORMTEXT ?????Decorating accessories FORMTEXT ?????Utilities (not provided by church) FORMTEXT ?????Other housing expenses FORMTEXT ?????Total FORMTEXT =SUM(B2:B7) 00For additional information on Housing Allowance/Exclusion, see these webpages. Please note that some resources use the terms exclusion and allowance and additional terms like exemption in interchangeable ways. see page 9 of housing allowance exclusion only applies for federal income tax purposes. It is not excluded from earnings subject to social security taxes (self-employment taxes).Use this worksheet if the church does not provide a parsonage as part of pastoral compensation.The IRS has specifically excluded the following from the costs “to provide a home”the cost of foodthe cost for domestic help (this probably excludes clothing as well).“To provide a home”, i.e. dwelling place and related structures (e.g. garage etc.)Rent of home/apartmentDown payment & Mortgage installment payments on home + related expenses such as commissions, attorney’s fees, escrow fees, etc. Mortgage interest, real estate taxes, special assessments: e.g. for street, sewers, etc.Insurance: tenant’s or homeowners – fire, theft, accident liability Repairs & Maintenance: to the home, appliances, lawn equipment, TV, light bulbs,cleaning supplies like brooms, cleanersFurniture and appliances (TV, computers, etc.)Decorating Accessories: linens, carpets, drapes, pictures & paintings, lamps, etc.Utilities: garbage removal, sewage, cable TV, gas water, electricity, telephoneMiscellaneous: lawn care, tools, plants, snow removal MINISTER’S ESTIMATE OF EXPENSESItem:Amount:Rent of home/apartment FORMTEXT ?????Purchase expenses and Mortgage payments FORMTEXT ?????Mortgage interest, taxes, etc. FORMTEXT ?????Insurance: tenants’/renters’ or homeowners FORMTEXT ?????Repairs & maintenance FORMTEXT ?????Furnishings FORMTEXT ?????Decorating accessories FORMTEXT ?????Utilities FORMTEXT ?????Other housing expenses FORMTEXT ?????Total FORMTEXT =SUM(B2:B10) 00For additional information on Housing Allowance/Exclusion, see these webpages. Please note that some resources use the terms exclusion and allowance and additional terms like exemption in interchangeable ways. see page 9 of housing allowance exclusion only applies for federal income tax purposes. It is not excluded from earnings subject to social security taxes (self-employment taxes). ................
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