Retired Pastor Housing Allowance

[larryquilon]

If you are a retired pastor, are you claiming a housing allowance on your RV?  If so what expenses are you considering as a part of your housing allowance?

[Kirk W]

Welcome to the Escapee forums! I'm not sure that I understand what you are asking of us. I am not a retired pastor but am friends with two of them that travel by RV. I have also served as church treasurer so understand about pastoral housing allowance. Are you are thinking of living fulltime in your RV and perhaps occasionally filling a pulpit or........... ? A little more information would help us to give a better response. 

[GR "Scott" Cundiff]

6 hours ago, larryquilon said:

If you are a retired pastor, are you claiming a housing allowance on your RV?  If so what expenses are you considering as a part of your housing allowance?

Larry, I researched the value of renting a similarly equipped RV on a lot in a RV park.  In other words, if I were to go to a reasonably nice RV park that offers rentals what would they charge me a month, including utilities.  (Seeking "fair rental value") I haven't been challenged on it so I can't tell you whether it passes muster with the IRS or not.

Edited January 9, 2019 by GR "Scott" Cundiff

[B&G Mulford]

Our denomination's Pension Board annually declares our whole pension to be "housing allowance." This meets IRS regulations. Have been retired since 2011 and have never had it challenged. They provide a form to file with your 1040. Check with your denomination's plan.

Bill

"Not all who wander are lost"

[Kirk W]

22 minutes ago, B&G Mulford said:

Our denomination's Pension Board annually declares our whole pension to be "housing allowance."

Are you serious? This is done to avoid paying income tax? 

[RV_]

Not exactly unheard of.

https://www.bing.com/search?q=pastoral+fraud&pc=MOZI&form=MOZLBR

 

Edited January 14, 2019 by RV_

[GR "Scott" Cundiff]

4 hours ago, Kirk W said:

Are you serious? This is done to avoid paying income tax? 

Since pastors have traditionally lived in church owned housing the tax structure is kind of strange.  For housing purposes, for instance, a pastor pays social security taxes on the value of the housing.  However, the pastor doesn't pay income tax on housing.  If a pastor receives money to provide his or her own housing, that money must be accounted for and, if the amount is more than the "fair rental value" it is taxed.  Once retired, funds provided by the denomination's retirement program is considered the same as a provided "parsonage."   However, all the information I've read and what I've tried to follow is that the IRS still limits that amount to "Fair rental value."  Anything above that is taxed. 
 

I'm sure there are plenty of exceptions, but a denominational pension for the average pastor is often well below that threshold.  I remember that before our retirement was restructured into a 401k type (actually called a 403b) our pastors got a retirement of about $4 a month for every year's service.  In other words: 40 years would get you $160 a month.  

Edited January 14, 2019 by GR "Scott" Cundiff

[sandsys]

2 hours ago, RV_ said:

Not exactly unheard of.

https://www.bing.com/search?q=pastoral+fraud&pc=MOZI&form=MOZLBR

That link leads to articles about fraud in non-denominational churches. They have nothing to do with pastors retiring from a denomination.

Linda

[Dmitche4]

Father in law got a pension from a denomination for housing allowance (retirement) his rental was (Sr./Assst. living) was 24k per year.  Pension was tax free because it was just below his living expenses.

David

[kb0zke]

Different denominations have different policies for their workers, so it is difficult to know what the OP had in mind. The Lutheran Church-Missouri Synod, for example, is structured differently than the Methodists. In the LCMS, workers generally stay until they accept a Call elsewhere. The congregation may or may not provide housing or a housing allowance. If a pastor spent his entire ministry in congregations that provided housing, he would be looking to buy (read get a mortgage) at age 65+. Since the housing was provided, the salary wouldn't be as high as it would need to be if he had to pay for his own housing. Now, at retirement, he doesn't have a lot in the bank, a fairly low pension, and he has to somehow provide a place to live for himself and his wife. IRS regulations have long recognized this, and allow retired pastors (and other rostered church workers) to have a housing allowance in retirement.

 

[SnowGypsy]

18 hours ago, kb0zke said:

Different denominations have different policies for their workers, so it is difficult to know what the OP had in mind. The Lutheran Church-Missouri Synod, for example, is structured differently than the Methodists. In the LCMS, workers generally stay until they accept a Call elsewhere. The congregation may or may not provide housing or a housing allowance. If a pastor spent his entire ministry in congregations that provided housing, he would be looking to buy (read get a mortgage) at age 65+. Since the housing was provided, the salary wouldn't be as high as it would need to be if he had to pay for his own housing. Now, at retirement, he doesn't have a lot in the bank, a fairly low pension, and he has to somehow provide a place to live for himself and his wife. IRS regulations have long recognized this, and allow retired pastors (and other rostered church workers) to have a housing allowance in retirement.

 

I think this question would be best asked of a tax specialist.  I think we will see many changes with the IRS coming up, so always check for the most recent info.   

[GR "Scott" Cundiff]

5 hours ago, SnowGypsy said:

I think this question would be best asked of a tax specialist.  I think we will see many changes with the IRS coming up, so always check for the most recent info.   

It's a hard call.  Very few tax specialists understand tax laws concerning (1) pastors, (2) retired pastors, and (3) fulltime RVing.  Earlier in my life I went to a pro to do my taxes and I ended up sitting there telling them the ins and outs of clergy taxes.  I decided fairly early on that if I had to tel them what to do I might as well do my own taxes.  

Our denomination's pension's board puts out a tax guide for clergy and it pretty helpful - covering not only housing issues, but also stuff like unreimbursed mileage, office expenses, etc.  

[larryquilon]

Thanks to all  of you for your insights and time!

[Randy Boschee]

Yes I know I'm late to the conversation, but I just saw it...I'm a retired master and live FT in my RV and travel extensively. I have all my retirement in a 503b. This allows for everything used Housing Allowance is not taxable. However, Anything over my allowance must be claimed as income and will be taxed. I can't just arbitrarily say something is HA, it must fit within the allowable expenses... Wish fuel and vehicle maintenance while pulling my 5th wheel was allowed? I think that only applies if you have a class A, B, or C motorhome.

 

[StraitRVing]

It is a bit tricky to say the least.  As a missionary that travels and lives in an RV full-time, it gets downright complicated.  Especially when the sending church is an independent church and not part of any denominational association. 

[Kirk W]

On 6/4/2020 at 9:06 AM, Randy Boschee said:

Anything over my allowance must be claimed as income and will be taxed.

May I ask why it should not be taxed? As a past church treasure and many years as a lay-leader, I have often marveled at what is allowed or overlooked by the IRS.