A tool designed to help clergy determine the portion of their compensation that can be excluded from gross income for federal income tax purposes relates to provided housing or a housing allowance. For example, it considers factors such as a minister’s designated housing costs, including rent or mortgage interest, utilities, and property taxes, to calculate the allowable exclusion.
Utilizing such a tool provides significant financial advantages for eligible clergy members, potentially reducing their tax burden and increasing their disposable income. This provision has been a part of the U.S. tax code for decades, reflecting a recognition of the unique nature of ministerial housing arrangements. Accurate calculation is essential for compliance and maximizing the benefit within legal parameters.
