Could Your Housing Allowance Be Too… High?

Most pastors treat the housing allowance like a dial with one setting: as high as it'll go. It's the intuitive move. It's also, for a lot of families, the wrong one.

I just amended a return for a pastor who did exactly that. He'd renovated his home, so he designated nearly all of his pay as housing – and it quietly cost his family the Child Tax Credit and Earned Income Credit along the way. The fix got him a $10,900 refund. Same income, same house, same family. Different number.

So yes, your housing allowance can be too low. It can also be too high. This webinar is about finding the right number.

In this free session, you'll learn:

• Why the designation has to be on the books first – and how to get it on your board's December agenda without it feeling awkward

• The "lowest of" rule: how the amount you can exclude is capped by your actual housing costs and your home's fair rental value, and why most folks only check one of those numbers

• How to set a number that's generous enough to use and realistic enough to defend

• The April surprise: why your housing allowance is free of income tax but not self-employment tax, and what to do about it now

• For treasurers: how the housing allowance should – and shouldn't – show up on the W-2

You'll leave with: a sample designation resolution your board can adapt, plus a worksheet for estimating your housing costs and fair rental value.