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Deduction for Unreimbursed Employee Expenses Suspended

President Trump signed the “Tax Cuts and Jobs Act” into law on Dec. 22, 2017. One implication of the legislation impacts church employees related to their ministry-related expenses.

Church staff who have claimed deductions for unreimbursed employee expenses need to be aware that this deduction was suspended. This means they will lose a deduction that may or may not be valuable depending on how much they benefit from the increased standard deduction.

Churches that either do not reimburse their pastor for expenses incurred in their ministry or cap these expenses should note the loss of the ability of the pastor to deduct these items. In such cases, the church should review its expense reimbursement policy and consider implementing an accountable reimbursement policy that allows for nontaxed reimbursement of these expenses.

Any changes in expense reimbursement should be implemented as soon as possible so as to lessen the impact when filing the 2018 Federal income tax return.

If you have questions concerning this issue please contact Jeff Cranford, BGAV Compensation Planning Specialist via phone at (804) 921-3945 or by email to jeff.cranford@bgav.org.

Upcoming Church and Clergy Seminars

Contact our office for more information on upcoming events.

Seminars run from 9 a.m. until Noon. All aspects of compensation will be covered to help minimize your risk and potential for substantial penalties resulting from non-compliance with State and Federal Tax Laws.

Register Online Now!

Contact our team today to register and secure post-seminar appointments:

Jeff Cranford : [staff-title] Jeff Cranford
Minister in Residence for Church Finances
Angela House : [staff-title] Angela House
Congregational Field Staff Administrative Assistant
800.255.2428 or 804.915.5000, ext. 5293